Japan’s real wages down every month in 2025

[TOKYO] Japan’s real wages shrank in December for a 12th consecutive month, as nominal pay growth slightly undershot slowing consumer inflation, labour ministry data showed on Monday.

Wage trends are among the most important data factors for the Bank of Japan (BOJ) to decide the next interest hike, after a December hike of 25bp to 0.75 per cent.

Inflation-adjusted real wages, a key gauge of consumer purchasing power, fell 0.1 per cent in December from a year earlier. This extended a contraction that started in January 2025, although the pace of decrease was the slowest since.

Average nominal wages, or total cash earnings, increased 2.4 per cent in December from a year earlier, to stand at 631,986 yen (S$5,123), up from revised growth of 1.7 per cent in the previous month.

Regular pay, or base salary, rose 2.2 per cent in December, also picking up pace from revised growth of 1.9 per cent in November.

Overtime pay, a barometer of private-sector strength, gained 0.9 per cent in December, slowing slightly from November’s rise of 1.2 per cent.

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Special payments, consisting mostly of one-time winter bonuses, rose 2.6 per cent in December, up from November’s revised gain of 1.5 per cent.

Full-year released on Monday showed Japan’s real wages were down 1.3 per cent in 2025, for a fourth year of shrinkage in real annual pay since 2022, when consumer inflation started to overshoot the BOJ’s target of 2 per cent. REUTERS