Japan wages rise in July, seen in steady uptrend: govt

[TOKYO] Japan's inflation-adjusted real wages rose in July from a year earlier, up for the first time in 27 months, and nominal wages bounced from the prior month's drop, government data showed on Friday, in a sign of gradual pick-up in pay.

Real wages rose an annual 0.3 per cent in July, the first increase since April 2013.

The data should be welcome news for policymakers struggling to sustain a virtuous cycle of rising corporate profits leading to a boost in household spending through higher wages.

Total cash earnings rose 0.6 per cent in the year to July to 367,551 yen (US$3,055), after plunging in June, which the labour ministry blamed in part on some firms delaying summer bonus payments.

Japanese companies, particularly small firms, have been reluctant to raise wages substantially to avoid increases in fixed labour costs.

Wage gains were lagging behind price hikes in recent years, causing real wages to slide and eroding households' purchasing power.

"July data showed a steady increase in regular pay, and summer bonuses appear to be solid. As such, we see nominal wages in an uptrend," said a labour ministry official.

Regular pay, which determines base salaries, rose an annual 0.6 per cent, up for a fifth straight month and the biggest gain since November 2005.

Overtime pay, a barometer of strength in corporate activity, rose an annual 0.6 per cent in July, while bonus payments increased 0.3 per cent.

REUTERS