Japan Real Wages Rise 2.4% in July, Largest Gain Since May 2021

Japan's real wages rose by 2.4% in July compared to the same month last year, marking the largest increase since May 2021 and the seventh consecutive month of gains.

The data from the government shows that this growth is driven by steady increases in nominal wages and relatively mild inflation, which have helped lift real wages. Additionally, special payments, mostly one-time bonuses, jumped 6.3% in July after a revised 4.7% growth for June.

Average nominal wages rose 4.7% to ¥436,401 ($2,799.96) per month, the biggest jump since January 1997 and faster than a revised 4% gain in June. Base salaries increased by 4.1%, accelerating from a revised 3.5% rise in June.

The inflation rate used to calculate real wages rose to 2.2% in July from 1.9% in June, reaching its highest point this year but remaining below the year-earlier level of 3.6%. BOJ Governor Kazuo Ueda has said that the central bank will debate raising interest rates at upcoming meetings, including in September.