Japan May household spending rises faster than expected
On a seasonally adjusted, month-on-month basis, spending increased 4.6 per cent, versus an estimated 0.4 per cent uptick.
Consumption and wage trends are among key factors the Bank of Japan is watching to gauge economic strength and decide how soon to raise interest rates.
Hefty pay hikes have been seen as essential to counter inflation-induced sharp increases in the cost of living.
Japanese companies agreed to raise wages by 5.25 per cent this year, marking the biggest pay hike in 34 years, the country's largest labour union group Rengo said on Thursday.
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CNA
4 hours ago
- CNA
'No perfect' CPF system exists, but its self-reliance principle is still pertinent: SM Lee
SINGAPORE: As Singaporeans live longer, the Central Provident Fund's (CPF) philosophy of self-reliance remains as pertinent as ever, Senior Minister Lee Hsien Loong said on Saturday (Jul 5). He added that while there is "no perfect CPF system", Singaporeans are generally in a good state now. As society's needs and working patterns change, and life expectancies lengthen further, the government will have to adapt and update the CPF scheme to keep it "fit-for-purpose" for new generations, he said. "This will be a perpetual process of innovation and adaptation. But that's the nature of many public policy issues," he said, adding that there is never a "once-for-all final solution". The CPF scheme is one such government policy that will always evolve and improve, but the same can be said of many others, including housing, healthcare, education and security, he added. SM Lee was speaking at the launch of a commemorative book by CPF to mark its 70th anniversary at Our Tampines Hub. The launch was also joined by Minister for Manpower, Dr Tan See Leng. At the launch, CPF also introduced a new one-stop financial guidance platform, Plan Life Ahead, Now! (PLAN), where members can access a personalised dashboard of financial planners. In Singapore, each generation funds its own retirement needs, SM Lee said. 'While self-reliance works well for the majority of the population, we recognise its limits for lower-income workers and for those who have not been in the workforce, such as housewives,' he added. In these cases, the government complements members' savings with targeted state support, such as the Workfare Income Supplement scheme, Silver Support Scheme and tax incentives to encourage voluntary CPF contributions from family members, he said. The government also provides additional support through packages for the Pioneer, Merdeka and Majulah generations, and periodic top-ups, which ensures a certain degree of intergenerational equity. 'But the basic principle remains: You must try your best to provide for your own future needs. And if that is still not enough, the government will be there to help you,' he said. Looking back at the past 70 years of CPF's history, SM Lee said "some very tough choices" were made in adjusting CPF rules and schemes. For example, the government had to cut employers' contribution rates by 15 per cent in 1985, after the total CPF contribution rate of 50 per cent from both employees and employers proved too high to sustain. The government also had to repeat the process of cutting CPF contribution rates during the Asian Financial Crisis in 1997, and in the early 2000s after the 9/11 terrorist attacks in the United States. It took them until 2015 to finally reach the total contribution rate of 37 per cent, which is about the "right level for the long term", SM Lee said. "NO OTHER PAINLESS WAY OUT" In his speech, SM Lee recalled meeting the late Lord Paul Myners, a British financial expert and UK city minister, who had done a comprehensive review of institutional investments made by UK insurance companies and pension funds. "He explained to me bluntly that with people living longer, there were basically only three ways for them to still have enough for retirement: One, save more while working. Two, spend less every month, to make their retirement savings last longer; or three, work longer and retire later," he said. "There is no other painless way out." All countries are confronted with this trilemma, and Singapore is no exception. "But that doesn't mean there is no way forward. It is still possible to make balanced, practical and politically workable arrangements in these three dimensions, to ensure Singaporeans' retirement adequacy," he said. The delinking of the CPF withdrawal age from retirement age has made it easier to raise retirement and re-employment ages to encourage workers to work longer, he said. While the national retirement age is 63, many choose to continue working, perhaps in a lighter job, beyond that, he added. SM Lee said that every change to the CPF system must be "carefully thought through". "In the end, for the whole CPF system to function and endure, Singaporeans must have faith that the scheme is sound and that the rules ultimately serve their best interests," he said. Today, public trust in the CPF is "very high", SM Lee added. People "faithfully" make their contributions every month, and many members voluntarily top up their own and their family members' CPF accounts with cash. Even when members reach 65 years old - when CPF payouts start - about 30 per cent do not make any withdrawals. "They are confident their money is safe, and they know that they are getting more than a fair deal," SM Lee said. NEW FINANCIAL PLANNING TOOL SM Lee penned the forward of the new book, called Save & Sound: 70 Years of CPF, which can be downloaded at CPF's website. The book chronicles the organisation's journey over the past seven decades and documents how the CPF system has evolved over the years. Through its new one-stop financial guidance platform, CPF members can access a personalised dashboard which consolidates digital CPF planners, such as the retirement payout planner, home purchase planner and the health insurance planner. The dashboard also pools together curated educational resources and features a new financial fitness questionnaire, where members can conduct self-assessments on their overall financial health. Announcing the launch of PLAN with CPF, CPF Board CEO Melissa Khoo said the dashboard seeks to enable members to make more informed financial decisions across different life stages. 'As we mark our 70th anniversary, we want to build on the CPF Board's legacy of service and innovation, and strengthen our commitment to support members through life's milestones, she said. CPF will also hold a CPF70 and Life's Supermarket exhibitions at Our Tampines Hub, which runs until Jul 10.
CNA
12 hours ago
- CNA
French President Macron announces 'historic' Airbus/Malaysia Airlines deal
PARIS :French President Emmanuel Macron said on Friday there had been an historic deal between Airbus and Malaysia, as Macron hosted Malaysian Prime Minister Anwar Ibrahim in Paris. Macron said such deals highlighted the importance of trade between France and Asia, as Europe faces up to likely tariffs from U.S President Donald Trump. "I am thinking of the projects signed in the key minerals sector, in the rare earths sector with the company Carester which has just opened up a factory in the region of Lacq, the transport sector with this historic co-operation between Malaysia Airlines and Airbus, and in the energy transition sector," said Macron. Industry sources told Reuters this week that Airbus was close to winning an order from Malaysia Aviation Group for more A330neo long-haul jets. "Airbus has been our focus. Malaysian Airlines 20, and AirAsia another 50," added Ibrahim.
CNA
15 hours ago
- CNA
AirAsia strikes deal for up to 70 Airbus A321XLR jets as restructuring nears end
SEOUL :AirAsia on Friday signed a memorandum of understanding with Airbus to buy 50 long-range A321XLR planes with conversion rights for another 20 of the single-aisle jets, as the budget airline nears the end of a restructuring process. Reuters reported last month that Tony Fernandes, CEO of AirAsia owner Capital A Group, was in talks to buy 50 to 70 of the latest Airbus narrow-body model, which would include the ability to convert some of the airline's large, existing Airbus order book into A321XLR orders. Malaysia-based AirAsia is one of Asia's largest low-cost carriers and one of Airbus' largest customers, with around 360 planes on order. Fernandes said the airline intends to order another 150 jets within a month, which would complete the carrier's fleet strategy for the time being. Fernandes did not say which models would be ordered, but confirmed that AirAsia remains in previously reported talks for a potentially large order of smaller planes, either the Airbus A220 or Embraer E2 regional jet. Capital A, hard hit by pandemic travel restrictions, was classified by Malaysia's stock exchange as financially distressed in 2022. Fernandes hopes to exit this so-called PN17 status soon, he said. Capital A is in the process of selling its AirAsia aviation business to long-haul unit AirAsia X to consolidate long and short-haul operations under a single AirAsia brand. After this disposal takes place, Capital A should exit PN17 status, Fernandes said. The expanded and standalone AirAsia, which will remain listed in Malaysia, intends to issue its first bond in October and two credit agencies are looking to rate the company, he said. LOW-COST NETWORK CARRIER AirAsia, which has a current fleet of 255, has been restructuring its plane order book after it faced financial difficulties during COVID-19. Like most budget airlines it mostly operates economy-only narrow-body planes. Fernandes said he was negotiating with Airbus about what to do with an historical order for 15 A330 wide-bodies but that he had not yet cancelled any. Fernandes wants to expand AirAsia flights to North America and Europe, but still at budget prices. Airbus' long-range narrow-body models are key to that vision, he says. But single-aisle planes can only fly so far, so AirAsia wants to establish hub airports in the Middle East, Europe and Asia-Pacific. AirAsia is in talks with four cities in the Gulf, including in Saudi Arabia and the Emirate of Ras Al Khaimah, Fernandes told Dubai Eye radio this week. Bahrain is also a potential candidate, a company presentation showed on Friday.
