Analysis-As inflation bites, Japan's PM finds unlikely ally in labour unions


Analysis-As inflation bites, Japan's PM finds unlikely ally in labour unions

As Japan faces its first major battle with inflation in decades, Prime Minister Fumio Kishida is extending a rare olive branch to labour unions, who he sees as crucial to his wider push to boost household wealth.

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Wage stagnation has blighted Japan's workers for years as the country was mired in a deflationary mindset that stopped firms raising salaries, and as weakened unions shied away from demanding more pay.

As part of his "new capitalism" platform to widen wealth distribution, Kishida has urged firms to boost pay and give households spending power to tolerate higher prices.

He is also approaching unions for help in achieving what other countries would frown upon: a spiral of rising inflation triggering strong wage growth.

In January, Kishida became the first premier in almost a decade to attend a new year party held by Rengo, the main umbrella union, in a rare gesture to organised labour by the head of the pro-business Liberal Democratic Party.

At the event, he called for labour union help in achieving "a bold turnaround in the downtrend in wage levels seen in recent years" and "wage hikes befitting an era of new capitalism."

In June, he made a similarly rare visit to Toyota Motor Corp's factory in what some politicians saw as a bid to court union votes.

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