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Japan Jan real wages fall at fastest pace in 6 months
[TOKYO] Japanese workers' wages fell in January at the fastest pace in six months after adjustments for inflation in a worrying sign that consumer spending will lose momentum this year.
Falling real wages suggest the government will struggle to convince companies to raise wages by 3 per cent or more this year at annual negotiations with labour unions, which are expected to conclude next week at large companies.
The fall in real wages also shows the Bank of Japan's 2 per cent inflation target is likely to remain a distant goal.
Real wages in January fell 0.9 per cent from the same period a year ago, labour ministry data showed on Friday. That followed a 0.3 per cent annual decrease in December and marked the biggest decline since a 1.1 per cent annual decrease in July 2017.
Nominal cash earnings in January rose 0.7 per cent from the same period a year earlier, slower than a 0.9 per cent annual increase in the previous month, the data showed.
Special payments, which include bonuses, in January rose 9.3 per cent on year, following a 1.0 per cent annual increase in December.
Overtime pay, a barometer of strength in corporate activity, was unchanged in January from the same period a year ago, versus a 0.6 per cent annual increase in December.
At a two-day meeting ending later on Friday, the BOJ is widely expected to maintain its massive stimulus programme and projection that the economy is headed for a moderate expansion.
Falling real wages suggest the central bank's attempts to achieve higher inflation continue to struggle after almost five years of massive money printing.