Japan Real Wages Decrease: Updated Dec. 9, 2025.

Japan's real wages fall 0.7% in October, down for 10th straight month

Article source: https://mainichi.jp/english/articles/20251208/p2g/00m/0bu/003000c

Ideas:

 Real wages are very important for households and consumers as they are a key indicator of purchasing power and how much consumers really have to spend.

For Japanese households real wages have been steadily decreasing which means their disposable income was/is getting less each month.

Most likely, as Japan is facing a critical labor shortage less part-time workers are being hired in favor of more full-time workers in Japan.

Nominal wages are not whats important for consumers as nominal wages just show how much inflation has increased or decreased relative to wages.

Again, real wages are the most important indicator as it shows how much real purchasing power consumers have in an economy.

As the article suggests nominal wages have increased for 46 straight months which means inflation has steadily increased in Japan since the pandemic.

A 3.4 percent increase in food costs is not good for most Japanese households and its especially not good for the low-income and fixed income groups in Japan.

It means these groups might have to look for food substitutes that might not be as good or healthy as their normal food choices.

The 3.4 percent might also mean there is going to be less spending in the Japanese economy as Japanese households, consumers cut-back on their normal shopping patterns.

Bonuses in Japan are usually paid at the end of the normal year, in Nov. or Dec. and again in around May or June.

Wages in Japan are usually much lower than wages in the US so companies make up the difference, somewhat, with bonuses twice a year.

As inflation has been a constant in Japan almost since the pandemic it doesn't look like it's suddenly going to just stop and everything will be good for Japanese households.

The Bank of Japan is going to watch what is going to happen with the Japanese economy related to inflation, price increases related to food, energy cost increases, wage talks and companies, and of course the US tariff situation and how its affecting the Japanese economy.

Most likely, but just a guess, based on the past history of the BOJ, they are not going to make a decision that will cause harm to the economy and they will most likely take another wait and see approach.

If they do make a move it will just be a very minimal incremental rate increase which they think is not going cause much harm to the Japanese economy.

Have a nice day!