Japan's central bank hikes governor's pay for the 1st time in 9 years

[TOKYO] The Bank of Japan has given its governor something the government wishes all private-sector employees in Japan could get - a pay raise that might help make the policy dubbed "Abenomics" work.

The pay-hike is the first in nine years for BOJ's governor. Other board members and executive directors are also receiving a 1.3 per cent raise.

The central bank, in a statement on Tuesday, said the annual salary of Haruhiko Kuroda for the year that ends March 2015 would rise to 34.67 million yen (US$294,638).

That marks the biggest gain in the governor's pay since the current BOJ law to guarantee its independence from the government took effect in 1998.

The BOJ said it takes into account the "general social situation" in setting its salary standards for the executives.

Kuroda, a former president of the Asian Development Bank, became BOJ governor in March 2013.

Prime Minister Shinzo Abe and Kuroda have urged companies to help bring Japan out of 15 years of deflation and achieve 2 per cent inflation by raising wages and boosting investments, in a bid to pave the way for sustained growth in the world's third largest economy.

But wages have been slow to rise at private-sector firms, while Japan's annual core consumer inflation hovers at around 1 percent, excluding effects of April's sales tax hike.

The latest data by the labour ministry showed workers'monthly total cash earnings rose 0.7 per cent year-on-year in September to 266,328 yen, up for seven months in a row. But inflation and the tax hike outweigh salary gains, resulting in a 3.0 per cent decline in real wages, down for a 15th straight month.

Last month, the central bank stunned markets by boosting its already massive asset-buying as the economy slid into recession.

REUTERS