Major Japanese firms to log record profits for 4th straight year on rate hikes

Disgraceful, while the Japanese people suffer.

Year after year, Japanese profits hit record levels. Yet real wages of the people who produce those profits fall. This was the major reason for Kishida's "new capitalism drive." It's a recognition that the nation's wealth needs to be seriously redistributed.

It also underscores not just corporate greed but the timidity of Japan's labor unions and old-fashioned and rigid hiring practices that fail to recognize talent or reward performance. Things need to drastically change. May as well scrap capitalism, I guess. Just look at the success of communist China.

So this is new capitalism really is, people suffer with high grocery price while company stash their profit.

Shame on them!

As soon as I read the headline, I knew JeffLee would comment on it, and I agree with him totally. How can you publish this story and then expect people to continue to see their real wages drop and spending power fail. All the while with increased tourism getting priced out of your own country. Soon will be offered new contracts for the coming school year and am 100% it will be the same price as they have been paying for the past 10 years!

And what is up with all the down votes. Who here is cheering record profits for companies but slave wages for workers!

Japan has the right system in place , we need big profits for big industry to stay alive !

the banking sector is projected to post 23.4 percent growth 

The securities sector will see a 30.5 percent jump

They have record profits and record greediness.

Agree with JeffLee comment.

Things need to drastically change.

If there only was a government to regulate and tax these record profits. If only people voted for a different way to arrange the economy.

And what is up with all the down votes.

This forum would be a much better place without votes.

May as well scrap capitalism, I guess.

Top management at most companies view their employees as being fairly compensated. Top management views the company owners, i.e., the shareholders, as the ones who should benefit through dividends when the company records a profit. 

Part of the compensation of most top management is significant stock remuneration, so, in essence, management greatly benefits from a good company performance while employees generally don’t. 

As a result, the wage gap expands between the haves and the have-nots.

Meanwhile, Japan’s inflation-adjusted real wages have fallen for three consecutive years! These are mostly the wages of the have-nots.

The have-nots would definitely benefit from some societal reform.

So remember that when your salary decreases again and does not keep up with inflation. People are just making the ultra rich like the west.

This forum would be a much better place without votes.

Can’t agree more. But traffic would plummet without them, negatively impacting the revenue of this business.

Lots of companies doing share buybacks instead of pay rises.

Good for investors, not much else to say.

boToday  07:57 am JST

Japan has the right system in place , we need big profits for big industry to stay alive !

What do you suggest they do with the profits. They don't seem to be doing anyone much good at the moment.

MarkXToday  07:40 am JST

As soon as I read the headline, I knew JeffLee would comment on it, and I agree with him totally. How can you publish this story and then expect people to continue to see their real wages drop and spending power fail. All the while with increased tourism getting priced out of your own country. Soon will be offered new contracts for the coming school year and am 100% it will be the same price as they have been paying for the past 10 years!

Numbers given in the article are distorted by the huge profits of very large companies. It would be more useful to have the mean numbers as well.

Very large companies sitting on records profits have actually increased base salaries by 5 % or more each of the last 2 years.

But many small and medium size companies do not make record profits at all. Actually many (especially the very small ones) are hardly surviving. Not much pay increase to be expected from them unfortunately.

Keep in mind in 2024, the Yen lost 12% of purchasing power against US$ and the US$ lost 23% of its real asset purchasing power using the CRB commodity index of 39% energies, 41% agriculture & 20% metals weighting.

Translation, Yen earnings 'real purchasing power' should be discounted 35% for 2024, actually BIG improvement, vs. 2020, 21, 22 and 23, all were far greater than (35%)!

Central Bank Money Printing and Global Proxy Wars sure don't help currency 'real' purchasing power do they!?

Big firms aren't just squeezing employees. They're also squeezing their suppliers, so the suppliers also have less resources available for raises.

Ensure you get your fair share by becoming a shareholder yourself. Anyone can buy shares. The growth of my index funds over the last few years has been phenomenal, far outpacing any salary growth.

This is depressing and disheartening to see, but the biggest problem in Japan isn't the stagnant wages, it's the high taxes.

If you adjust Nikkei 225 to $based real asset purchasing power, using CRB index benchmark, Nikkei 225 at 39K today real asset purchasing power of 2020 Nikkei 225 of approx. 6.5K, 6X LESS!!!

Translation, above 'money' game allows Govt. to collect capital gains, but nearly every investor has LOST real asset purchasing power on Nikkei 225 investments since 2020, PLUS paid Capital Gains Taxes of 20%!!

FAR worse for JGBs than Nikkei 225 with usually more duration and far lower returns!

Owners of real assets, like Pres. Putin naturally not too worried about above money game 'troubles'!

I do not live in Japan anymore but want to go back after retirement. My Japanese friends are earning the same money in the same jobs (with more expertise and experience) that they did 20 years ago. How can the Japanese government not treat their citizens better! Increase wages, give families more incentives to have children, stop overworking people. 帰らなくていいんかな。

Very large companies sitting on records profits have actually increased base salaries by 5 % or more each of the last 2 years.

But many small and medium size companies do not make record profits at all. Actually many (especially the very small ones) are hardly surviving. Not much pay increase to be expected from them unfortunately.

Maybe if these very large companies didn't sit on their profits and pay middle to small sized companies what they deserve without trying to squeeze every last yen out of them, they too would be able to do better, and then pay their workers more, thus helping everyone, and not only a few.

Bee, wages in Japan are WAY down vs. 20 years ago

Japan's $based GDP was approx. $40K per capita in 2000 and approx. $30K per capita in 2024 and that does not even account for currency real asset purchasing power destruction and inflation = HUGE

Central Bank Money Printing and Global Proxy Wars Cause Currency Purchasing Power Destruction & Inflation!

Many here ignore that capitalism is growth at all costs. They simply have to make the biggest possible profits, for keeping and attracting workplace and management specialists, buying new machines or other equipment and facilities, financing more and expensive research for new products and keeping pace with rivaling businesses or countries, open new business fields and expanding existing ones, making investments elsewhere or catching up other new and sudden opportunities. It's of course easy and possible to distribute all business income among employees, giving them the wage hikes they dream of every single day and night. But it's just impossible, it would make you happy only one time and then your company goes bankrupt and disappears, with all employees and managers drifting into poverty. No one should really want that on a bigger scale, considering the consequences in society. So it's very simple, if you don't agree, envy them and maybe think you can do better, go ahead. Open up your company and make instead less profits, or make similar big profits and feel free to pay anyone the amount he or she wishes for.

Congrads to Japan Inc and the corpo class!

share buy backs=they got the 'bucks' to spend, but more willing to attract more investment. I am going to compete for -ve votes. Where are the dividends? I enjoy the responsibility of paying CGT. As a socialist minded person, It's not what you earn, it is all about how you spend it. I reckon stamp on jpn shares is ~1%. too low by western standards but slightly more attractive than my other asians. How am I so 'lucky'. clear your mortgage ASAP. I once witnessed 15% mortgage rates. taught a good lesson. FACT i am not a financial advisor.

Congrats to Japan Inc.?

See above, Nikkei 225 and its workers never poorer or more irrelevant technologically in terms of real asset purchasing power in MANY decades! EPS growth = Fantasy!

Soccialist view point (I did a small cheat to verify, sorries) UK unemployed 4.4%, DE 6.2%, FR7.6%, JPN, ~2.5%, hence JPN employed..exploited mmmmh. HSE, Two sides of a coin for the broadminded. If you do'nt like it. pay more taxes.. OOOPs

empty economy only for major firm, wealth class and ruling party.

Though major firm's profit record high, middle and small companies what most labours work have gone into bankruptcy one after another, unprecedented poverty in postwar history spreading among general citizen.

Funny how your comment is down voted if you say the companies are greedy, keeping all their profits for themselves without raising the employees salaries.

Real salaries in Japan are getting lower and lower each ear, the purchasing power is plummeting due to high inflation, weaker and weaker Yen and prices hikes, however the Companies and Corporations are doing record profits.

Greed, greed never changes.

companies are greedy, keeping all their profits for themselves without raising the employees salaries.

In normal economies, companies belong to their shareholders. Profits are paid to shareholders, if there are any. Or retained which helps the shareholders through higher share prices.

If there is a recession, or a scandal specific to the company, well then there will be no profits - the company will rather burn through the equity that the shareholders put into the company, losing their money.

What part of this is unfathomable greed?

As for employees in normal economies, if they feel they could earn better money elsewhere they might elect to change jobs. This is the sort of action that can lead to companies paying higher wages - they may need to do so to retain their workers. And indeed, much unlike normal economies, many companies have been raising wages in recent years.

if you don’t like the outcomes of Japan’s policies perhaps you should blame Japan’s policies rather than humans being human (aka greedy).

My view is Japan has made a massive policy mistake in throwing out price stability in favour of price instability. They hope that higher nominal numbers will fool people into thinking the economy is firing on all cylinders, but at least the issue of declining real wages has been identified.