Japan firms baulk at pay rise, inflation below BoJ goal

A pedestrian walks in front of the Bank of Japan headquarters (rear) in Tokyo on Dec 20, 2013.A Reuters poll of econommists suggest that companies are unlikely to raise wages of workers, posing a challenge to Abe's economic plan to revitalise Japan - AFP Photo.

TOKYO: Japanese companies are unlikely to raise wages significantly this year and inflation will be well below the official target, economists said in a Reuters poll, suggesting tough challenges for Prime Minister Shinzo Abe's drive to end years of falling prices and generate robust growth.

The forecasts bolster the view that, with a few high-profile exceptions, businesses are cautious about passing on higher profits to employees, which is seen as vital to Abe's hopes for sustained growth in the world's third-biggest economy.