Japan April real wages flat, nominal pay rises

[TOKYO] Japan's real wages were flat in April from the same period a year earlier, with rising prices offsetting gains in nominal pay and possibly hurting households' purchasing power.

Real wages, which are adjusted for moves in consumer prices, were flat in April from a year earlier, labour ministry data showed on Tuesday. It followed a revised 0.3 per cent annual fall in March.

Wage earners' nominal cash earnings rose an annual 0.5 per cent in April, the biggest rise in four months. Revised data showed that nominal wages were flat from a year earlier in March.

A rebound in overseas demand has helped boost Japan's exports and output in recent months, and the world's third-largest economy grew in the first quarter to mark the longest period of expansion in a decade.

But the sluggish growth in real wages suggests benefits of the recent recovery have yet to fully reach Japanese households.

Household consumption fell more than expected in April due to lower spending on cars and education fees, separate data showed, signalling consumer spending continues to lag behind improvement in other areas of the economy.

Regular pay, which accounts for the bulk of total pay and determines base salaries, has been generally rising in recent months and in April grew an annual 0.4 per cent, the biggest increase in three months.

Special payments, such as bonuses, in April grew 5.6 per cent from a year earlier, following a revised 1.7 per cent annual rise the previous month, data also showed.

Special payments are generally small, so even a slight change in the amount can cause big per centage changes.

Overtime pay, a barometer of strength in corporate activity, dipped 0.2 per cent in April from a year earlier, following a revised 0.6 per cent annual decline in March.

REUTERS