Japan’s real wages up for fifth month in May, slower due to inflation

[TOKYO] Japan’s real wages rose 1.4 per cent in May from a year earlier to mark a fifth month of increases, although the growth rate slowed amid re-accelerating consumer inflation, government data showed on Tuesday.

Average nominal wages - or total cash earnings - rose 3.2 per cent to 311,165 yen (US$1,918), slightly slower than a revised 3.6 per cent gain in April.

Coupled with a faster increase in consumer inflation that began to reflect the impact of the US-Israeli war on Iran, the real pay gain in May stood at 1.4 per cent, decelerating from April’s revised 2 per cent rise.

Workers’ base salaries, or regular pay, climbed 3 per cent, following a revised 3.3 per cent gain in April. Overtime pay growth in May was 2.9 per cent, down from a revised 4.8 per cent increase in April.

Special payments, consisting mostly of one-time bonuses that tend to be volatile outside of summer and winter months, rose 5.2 per cent in May after a revised 10.3 per cent increase for April.

While Japanese companies kept up with an average annual wage hike of more than 5 per cent for a third year, the cost of living will likely continue to creep up in the coming months, as rising import costs from a weak yen and an earlier energy cost spike will spread downstream to consumer items.

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The Bank of Japan, which last month raised interest rates to a 31-year high, has said steady wage and price increases are a prerequisite for another hike. REUTERS