Last week, Uniqlo announced a 40% rise in wages for Japanese employees. Uniqlo plays good “corporate citizen”. Japan Prime Minister Fumio Kishida has been advocating of a rise in salaries since October. 40% is a staggering number. Whereas most Japanese companies’ wage structure is based on seniority, Uniqlo plans to evaluate employees on their performance. Wage rises are to be financed by rises in price of good sold.

Another way to protect margin from the impact of wage rises is robotics. Fast-Retailing has been co-developing with Mujin, a Japanese start-up specialized in combining robotics with 3-D vision, a robot with one arm that can pick-up tee-shirts and place them in a box. Whilst it seems easy, handling textile and clothes is a challenge for robots: even Amazon depends on human pickers. Thanks to this new robot manufactured by Yaskawa Electric, Uniqlo has cut 90% of its workforce in its Tokyo flagship warehouse.

This raises several issues and solutions. On the macro-side, we had several recent and contradictory maneuvering from the Bank of Japan. The direction seems for Japanese rates to rise, but nothing dramatic is expected before the expected leave of Governor Kuroda in April after a 10-year spell. A regime change would significantly impact the level of the Yen and the Japanese institutional appetite for foreign bonds.

After two lost decades, we might see Japanese assets potentially becoming relevant in 2023. The other implication is that Japan (and the rest of a fast-aging world) needs more and smarter robots. In that corner, Japan is a key player.