Japanese real wages decline in August for a 17th month
TOKYO (Reuters) — Japan's real wages in August declined for a 17th month, government data showed on Friday, as persistent price hikes continued to outpace salary growth.
Global financial markets closely follow wage trends in the world's third-largest economy as the Bank of Japan emphasises sustainable wage rises as a prerequisite for deciding whether and how to dismantle its ultra-loose monetary stimulus.
Inflation-adjusted real wages, a barometer of consumer purchasing power, fell in August by 2.5% from a year earlier following a revised 2.7% drop in the month before, data from the Ministry of Health, Labour and Welfare showed.
The consumer inflation rate officials use to calculate real wages, which includes fresh food prices but excludes owners' equivalent rent, slowed down to 3.7%, the lowest in 11 months. But nominal pay growth in August was 1.1%, unchanged from July after a downward revision and weaker than in June and May.
Prime Minister Fumio Kishida said last week he would submit an extra budget to this month's extraordinary parliamentary session that would fund a new economic stimulus package to help households ease the pain of price hikes and boost wages.
Special payments dropped 5.4% year-on-year in August, the last month of the summer bonus season, marking the biggest fall since January 2021. A labour ministry official attributed the decline to more firms offering the bonus payment earlier this year, reflected in a 0.6% uptick in July and a 3.5% rise in June.
Base salary growth in August climbed by 1.6% year-on-year, from a revised 1.4% gain in the previous month, the data showed.
Overtime pay, a gauge of business activity, increased in August by 1% year-on-year, after a revised 0.0% in July.
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