Categories: Business & Economy

Japan wage data, August. Higher nominal wage, lower real wage (inflation adjusted)

Japanese real wages fell for the eighth consecutive month in August as inflation continued to outpace nominal wage growth, adding pressure on the Bank of Japan’s cautious path toward policy normalization.

Government data showed inflation-adjusted real wages fell 1.4% year-on-year in August – the biggest fall in three months – after a downwardly revised 0.2% fall in July. The decline was driven by continued high prices and a sharp 10.5% drop in one-off special payments, such as bonuses, as some companies struggled to match last summer’s payouts.

Nominal wages, or total cash earnings, rose 1.5 percent to an average of ¥300,517 ($1,994), the smallest increase in three months. Regular wages rose 2.0%, while overtime hours – often seen as an indicator of business activity – rose 1.3%, a slowdown from July’s 3% rise.

The consumer inflation rate used to calculate real wages rose 3.1% in August, the lowest rate in 10 months but still more than enough to erode household purchasing power. Despite this, the BoJ maintains that wage hikes will continue next year, although weaker data and the uncertain impact of US tariffs complicate prospects for future rate hikes.

Impacts to monitor:

  • FX: Weak wage data reinforces expectations that the BOJ will remain cautious on rate hikes, which will weigh on the yen.

  • Rates: Sluggish real income growth suggests limited inflation persistence, keeping JGB yields capped.

  • Stocks: Consumer sectors could face challenges from weak household spending, while exporters could benefit from a weaker yen.

Source link

Michael Johnson

Recent Posts

Trump-backed Matt Van Epps wins GOP primary in Tennessee House race

Matt Van Epps is expected to win a crowded Republican primary in the special election Tuesday to replace a former…

1 minute ago

Karnataka Dy Cm Shivakumar declares that the formation of the authority of the Grand Bengaluru and five municipal bodies is “historic”

The Chief Minister of Karnataka, DK Shivakumar, announced Tuesday, September 2, the creation of Greater Bengaluru Authority (GBA) and five…

3 minutes ago

Gold price hits $4,000 an ounce for the first time

Fake gold bars piled up in Clermont-Ferrand France on March 25, 2025.Romain Costaseca | AFP | Getty ImagesGold prices hit…

8 minutes ago

Love Is Blind Season 9: Kacie defends Patrick’s breakup

How Love Is Blind's Patrick Suzuki Feels About Kacie McIntosh After Attraction CommentsKacie McIntosh holds on. THE love is blind…

9 minutes ago

Spinoff HSBC: Bank’s main leaders face Tense shareholders in Hong Kong calling for a breakup

Hong Kong Cnn - The best HSBC brass defended their strategy on Monday on the shareholders frustrated on the largest…

12 minutes ago

Timberwolves Hyland bones hope to find his niche

When Bones Hyland first met Tim Connelly, Connelly was the president of basketball operations in Denver and Hyland was entering…

16 minutes ago