Weak Japan wages bode ill for Abe's aim of reviving economy

[TOKYO] Japanese wage earners' total cash earnings fell for the first time in nine months in November and real wages fell for the 17th month running, highlighting the task Prime Minister Shinzo Abe faces to revive the economy.

Officials said the 1.5 per cent annual drop in total cash earnings was partly due to the labour ministry compiling the data earlier than usual, meaning it fails to fully reflect overtime pay and special pay.

Still, real wages adjusted for inflation fell 4.3 per cent year-on-year last month - down for the 17th straight month and marking the steepest drop since December 2009 - in a blow to Abe's reflationary brand of policies known as "Abenomics".

Wages are crucial to the success of the Abenomics recipe of monetary and fiscal stimulus and promises of reform, aimed at breaking a cycle of tepid growth and deflation.

"We maintain our view that wages are gradually rising as seen in steady gains in regular pay," a ministry official said.

Special payments, a category including bonuses, dropped 27.0 per cent in the year to November. Overtime pay, a barometer of strength in corporate activity, fell 0.9 per cent - the first decline in 20 months, the labour ministry data showed.

Regular pay, or base salaries which determine the trend of broader wages, rose 0.2 per cent, up for the sixth month in a row.

Abe is urging major firms to raise base pay in the fiscal year from next April, and business leaders have vowed to do their utmost to lift wages.

REUTERS