TOKYO (Reuters) – Japanese workers’ real wages shrank in January for the 22nd consecutive month but at the slowest pace in over a year on weakening price pressures, data showed on Thursday.
The country’s wages trend is one of crucial data points the central bank watches to gauge pay and inflation outlooks, factors to consider in unwinding its massive stimulus programme.
BOJ Governor Kazuo Ueda has expressed hope that even if real wages don’t turn positive immediately, this year’s labour-management pay negotiations will yield solid results to boost consumption.
Inflation-adjusted real wages, a barometer of consumer purchasing power, slipped 0.6% in January from a year earlier, data from the labour ministry showed, following a revised 2.1% fall in December. The pace of decline was the joint-slowest since December 2022.
The consumer inflation rate the government uses to calculate real wages, which includes fresh food prices but excludes rent or equivalent, rose at the slowest pace since March 2022 at 2.5% due to waning cost-push inflation from commodity imports.
Despite falling short of outpacing inflation, nominal pay grew at 2.0% year-on-year in January, posting the biggest growth since last June. That followed a revised 0.8% hike in December.
The pay bump was attributed to 16.2% advance in special payments reflecting winter bonuses, a labour ministry official said.
Regular or base salary in January went up 1.4% year-on-year, the same as a revised figure in the previous month. Overtime pay, an indicator of business activity strength, edged up by 0.4% year-on-year, followed by a revised 1.2% decrease.
Japanese businesses are on the cusp of wrapping up the annual collective pay talk season known as “shunto.” The labour unions are demanding pay rises well in excess of last year’s hikes, which were the biggest in more than three decades.
Core consumer inflation in Japan’s capital, a leading indicator of nationwide price trends, exceeded the BOJ’s 2% target, the government said on Tuesday.
However, an index of stripping out the effect of energy costs slowed in February, shifting the focus on whether Japan can see wage hikes strong enough to underpin consumption.
The table below shows preliminary data for monthly incomes and number of workers in January: —————————————————————-
Payments (amount) (yr/yr % change)
-Total cash earnings 282,270 yen ($1,882.80) +2.0
-Monthly wage 269,359 yen +1.3
-Regular pay 250,755 yen +1.4
-Overtime pay 18,604 yen +0.4
-Special payments 12,911 yen +16.2
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Number of workers (million) (yr/yr % change)
Overall 52.750 +2.0
-General employees 35.632 +1.5
-Part-time employees 17.119 +3.2
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The labour ministry defines “workers” as 1) those employed for more than one month at a company that employs more than five people, or 2) those employed on a daily basis or had less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted, at a company that employs more than five people.
To view the full tables, see the labour ministry’s website at:
($1 = 149.9200 yen)
(Reporting by Satoshi Sugiyama; Editing by Toby Chopra)
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