Japan Sees Eighth Straight Month of Real Wage Growth in August
Japan’s real wages continued their upward trend in August, rising 1.5% compared to the same month last year. This marks the eighth consecutive month of gains, reflecting a steady recovery in wage growth according to government data released on Wednesday.
The latest figures support expectations that the Bank of Japan may continue raising interest rates, following its recent benchmark rate hike last month. However, the growth in real wages slowed down from July’s revised 2.0% increase.
Average nominal wages, which include total cash earnings, increased by 3.8% to 311,364 yen ($1,969.66), down from a revised 4.3% rise in July. Workers’ base salaries saw a 3.8% increase, unchanged from July’s revised figure. Overtime pay growth accelerated to 5.2% in August, up from July’s 4.5%. Special payments, primarily consisting of one-time bonuses, showed no growth after a revised 5.3% increase in July.
The inflation rate used to calculate the real wage indicator remained steady at 2.2% in August, down from 3.1% a year earlier. Meanwhile, annual core inflation in Tokyo surged in September at its fastest pace in 10 months, highlighting rising price pressures and strengthening the case for further interest rate hikes by the central bank.