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Japan Feb real wages fall for third straight month
[TOKYO] Japanese workers' wages fell for the third consecutive month in February after adjustments for inflation, in a worrying sign that consumer spending could slow as salaries fail to keep pace with gains in prices.
The data also reinforces the perception that the Bank of Japan's 2 per cent inflation target is likely to remain a distant goal, suggesting it will not begin to scale back its massive stimulus progamme any time soon.
Real wages fell 0.5 per cent in February from the same period a year ago, labour ministry data showed on Friday. That followed a revised 0.6 per cent annual decrease in January.
Nominal cash earnings rose 1.3 per cent in February from the same period a year earlier, faster than a revised 1.2 per cent annual increase in the previous month.
Overtime pay, a barometer of strength in corporate activity, rose an annual one per cent in February versus a revised 0.1 per cent increase in January.
Special payments, which include bonuses, rose 33 per cent year-on-year in February, following a revised 2.9 per cent annual increase in January. The rise in February was exaggerated by the fact that the size of special payments was small compared to overall pay.
The decline in real wages comes one day after BOJ data showed household sentiment worsened and inflation expectations weakened in March, suggesting it will be difficult for the central bank to convince consumers to be less cautious about their spending.
The ministry defines "workers" as 1) those who are employed for more than one month at a firm that employs more than five people, or 2) those who are employed on a daily basis or have less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted at a firm that employs more than five people.