Japan’s October real wages fall for 10th month despite upbeat nominal pay
The country’s biggest union group Rengo, of which JCM is a member, is targeting at least a 5% increase in overall pay next year
[TOKYO] Japan’s real wages shrank for the 10th consecutive month in October, with an uptick in nominal pay falling short of taming relentless consumer inflation, government data showed on Monday (Dec 8).
The Bank of Japan (BOJ) is likely to raise interest rates next week and the government is expected to tolerate the decision, sources have told Reuters. Wage trends will be among the most important data points when the BOJ board makes a decision on rates during its Dec 18 to 19 meeting.
Inflation-adjusted real wages, a key barometer of consumer purchasing power, fell 0.7 per cent in October from a year earlier, the labour ministry data showed.
That was slower than a revised 1.3 per cent contraction in September but extended a losing streak that started in January.
Average nominal wages, or total cash earnings, increased 2.6 per cent from a year earlier to 300,141 yen (S$2,503) in October, a three-month high that followed a revised 2.1 per cent growth in the previous month.
The gain was still not enough to surpass the 3.4 per cent rise in consumer prices. The inflation rate used to calculate the headline real wage indicator includes fresh food prices but not rent costs and it tends to be higher than the core rate.
Regular pay, or base salary, rose 2.6 per cent in October, picking up pace from a revised 2 per cent growth in September. Overtime pay, a gauge of private-sector strength, gained 1.5 per cent in October, also better than September’s revised 1 per cent rise.
Special payments, consisting mostly of one-time bonus payments, increased 6.7 per cent in October. The indicator tends to be volatile outside of summer and winter bonus months.
Japan Council of Metalworkers’ Unions, a major labour group representing manufacturers, said last month that it would seek the same target for spring 2026 wage negotiations as it did this year.
The country’s biggest union group Rengo, of which JCM is a member, is targeting at least a 5 per cent increase in overall pay next year. REUTERS
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