Press Conference by the Deputy Chief Cabinet Secretary (Excerpt)

Q&As

REPORTER: I have a question concerning the Trans-Pacific Partnership (TPP) Agreement. It has been reported that an official in the Trump administration has indicated that President Trump intends to request that Japan enter into bilateral trade negotiations with the United States instead of the TPP during the Japan-U.S. summit meeting scheduled in February. Given that Japan is maintaining its stance of promoting the TPP, how will the Government respond if a request is made to engage in bilateral consultations?

DEPUTY CHIEF CABINET SECRETARY HAGIUDA: As it is expected that the Trump administration’s trade policy will become clearer once the ongoing process of confirming trade and economy-related cabinet members has been completed, until then I would like to refrain from making any speculative comments about U.S. policy. Firstly, the Government will be engaging with the new administration at various levels to discuss the ways in which our economic relations can be further developed and deepened. As a part of those discussions, we will also continue to actively seek understanding concerning the strategic and economic significance of the TPP.

REPORTER: The Ministry of Health, Labour and Welfare has announced that the number of foreign workers in Japan exceeded 1 million for the first time as of the end of October 2016. This reflects the shortage of human resources domestically and the Government’s active efforts to expand acceptance of foreign workers. Can I ask for the Government’s views on these latest figures?

DEPUTY CHIEF CABINET SECRETARY HAGIUDA: As of the end of October 2016, the number of foreign workers in Japan stood at approximately 1.08 million. As you have noted, this is the highest figure ever, and the first time that the number of foreign workers has exceeded 1 million since 2007, when companies were first obliged to report on the number of foreign workers they employ. There are thought to be various chief factors behind this increase, which include the Government’s promotion of mechanisms to accept highly-skilled foreigners, an increase in the number of overseas students in Japan who are engaging in part-time work, and also an increase in the number of foreign residents who are classed as permanent residents or spouses of Japanese nationals who have found work due to the steadily improving employment situation. The Government will continue efforts to improve the structures for managing foreign workers who are engaged in employment in Japan.

(Abridged)

REPORTER: I have a question concerning the consumer price index (CPI). In figures for 2016 released by the Ministry of Internal Affairs and Communications today, the CPI excluding fresh food has fallen 0.3 percent year-on-year to 99.7, the first decrease for four years. Core CPI for December dropped 0.2 percent year-on-year, marking the tenth consecutive monthly decrease. These decreases reflect consumer desire to economize, and yet the economy has recently shown signs of picking up, including rises in crude oil prices, yen depreciation and stock price increases. However, it seems that Japan is still some way from exiting deflation, so can I ask for your views on these latest figures? Also, given that the Prime Minister has stated that wage increases that keep pace with commodity price increases are essential in order to create a positive economic cycle, could you tell us the Government’s opinion concerning wage increases in the upcoming spring wage offensive in light of commodity price trends?

DEPUTY CHIEF CABINET SECRETARY HAGIUDA: As you have noted, the CPI statistics have been officially announced today. However, with regard to deflation, instead of looking at commodity price trends on a monthly basis, it is preferable to make a judgment based on underlying trends and having first engaged in a detailed analysis of the background to these trends. With regard to the current environment and its impact on commodity price trends, against a backdrop of tighter labor supply and demand and improvements in the employment and income situation, the GDP gap, which is an indicator of the overall supply and demand situation in the economy, is on a decreasing trend. Looking at the Japanese economy overall, the Government’s view is that the economy is continuing to improve gradually. Furthermore, as economic policies designed to realize future-oriented investment are implemented, it is expected that commodity prices will increase gradually. Accordingly, the Government believes that there is no cause for pessimism in the overall economic situation. In the sense that consumption is the fundamental driver for the Japanese economy, the Government considers measures to increase wage levels to be a priority issue. As the Prime Minister himself noted in the third meeting of the Council for the Realization of Work Style Reform on November 16, 2016, the highest-ever level of wage increases since the start of this century have been realized three years in succession. With regard to this year’s spring wage offensive, the Government would like to see a fourth successive increase in base pay that is at least at the level of last year’s increase.