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Business

Manufacturers in Japan hold bonuses in check

TOKYO -- Summer bonuses in Japan are expected to increase 1.98% on average in 2016, climbing for the fourth straight year, according to a Nikkei Inc. survey.

Bonuses will average 846,478 yen ($7,685) overall: 921,768 yen at manufacturers and 537,973 yen at nonmanufacturers. But growth in the manufacturing sector's payouts is slackening from 1.87% in 2015 to 1.47%, undercutting a potential catalyst for domestic consumer spending. The figures are based on interim results from 206 companies.

Manufacturers have been hit by the slowdown in emerging economies and the yen's recent appreciation. The steel industry will pay sharply lower bonuses, with the electric machinery and shipbuilding sectors also curtailing payouts.

Meanwhile, bonuses among nonmanufacturers are on track to rise 4.89%, compared with 3.65% a year earlier. Bigger payments at Chubu Electric Power and ANA Holdings unit All Nippon Airways -- not including flight crew -- are helping to push up the sector's average.

The cross-industry average bonus has surpassed the 837,036 yen from the summer of 2007, prior to the financial crisis. Yet the rate of growth has slowed considerably from 9.06% in 2014. And with payouts stagnating particularly among manufacturers, which account for four-fifths of the tally, summer bonuses are not likely to provide as much of a boost to consumer spending.

(Nikkei)

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