.

[nottu]

[Neo-Rio]

Japan is in for a bumpy one. The yen is on the rise thanks to the flailing Euro now, and the USD is in not much better shape. Investors are racing to the yen.

....just the thing Japan needs right now, for its exports to suddenly become more and more expensive, making the already stagnating economy stagnate some more.

[nottu]

[GomiGirl]

I personally know a few people who have had to take a "voluntary" 15-20% pay cut. These are the lucky ones who still have a job.

[FG Lurker]

Many companies have banned all overtime work and more and more are cutting working hours by 2 to 4 days per month and reducing salaries by that amount. I know a good number of people who have been affected by both of these.

[nottu]

[Christoff]

>>For 2009 as a whole, average wages at firms with five or more employees fell 3.9%, with salaries falling 1.2%, overtime pay plunging 13.5% and bonuses seeing a 12.1% drop. This equates to an overall decline of 2.9% in real wages.<<

This is HUGE, especially on top of prior years of deflation.

Consider what a 2.9% decline in real wages means to discretionary income. Using the 549,259 yen figure, the decline in wages would be ~16,000/month. This probably completely wipes out discretionary spending for a large number of earners and obviously curtails the remainder. The dining/entertainment business already in the doldrums from shrinking business spending is getting finished off from the absence of any real support from the average consumer.
Everything you read about Ginza hostess bars is as bad as it sounds.
And Hankyu - Kyoto won't be the last.
............An aside - Interesting link about Kyoto depato including Hankyu http://www.mutantfrog.com/2010/02/04/kyoto-and-the-history-of-the-department-store/
I believe their are ultimately ramifications for Japanese sovereign bonds and the Yen. We may finally see a breaking point as the household savings rate goes negative.
This is going to be a very interesting year in Japan.

A large portion of young japanese live at home with the parents after the bubble burst, meaning discretionary spending is more like 80% of their income.

[nottu]

[wuchan]

Could it be the BOJ talks the market talk but wants controlled deflation?
Opinions....

Very interesting question. From what I have seen, if the company is doing well...... er, making any kind of profit in the current economy the top guys get raises but the poor middle managers get their bonuses cut. I have talked with some old gents who ran companies leading into the bubble and they seem to think that they should have cut wages as the bubble was growing to keep a good factory worker to salary man ratio. Now most people want to be salary persons and have zero interest in working next to the non white FGs. IDK... the pre bubble guys have a much different opinion than the guys who were early career during the "good ol' times". [/babble]