Japan Real Wages: Ideas Later.

Japan real wages in June rise for 6th straight month on summer bonuses

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TOKYO (Kyodo) -- Japan's real wages in June rose 1.6 percent from a year earlier, increasing for the sixth straight month in the longest positive streak since a seven-month run in 2021, reflecting higher summer bonuses, government data showed Wednesday.

Nominal wages per worker, including base and overtime pay, were up 3.4 percent at 531,677 yen ($3,370), marking the fifth straight month of growth exceeding 3 percent and the first such streak in more than 34 years, the Ministry of Health, Labor and Welfare said.

The latest growth in inflation-adjusted wages matched an upwardly revised 1.6 percent rise in May and came as the inflation index used for the data climbed to 1.9 percent in June from 1.7 percent in the previous month.

Wage growth was supported by a 3.5 percent increase in special earnings, mainly bonuses, to 232,445 yen, as this year's robust "shunto" labor-management negotiations kept pressure on the corporate sector to raise pay.

Data released Tuesday by the Japan Business Federation, the country's largest business lobby known as Keidanren, showed that major companies agreed in the talks to raise wages by 5.37 percent on average, surpassing 5 percent for the third straight year.

The organization also said summer bonuses at major firms were up 1.88 percent on average from a year earlier on the back of healthy corporate profits, topping 1 million yen for the first time since comparable data became available in 1981.

While the yen's sharp fall has pushed up import costs, Japan's consumer prices have remained below 2 percent due in part to government measures to keep down gasoline and other energy prices, helping real wages to stay in positive territory.

Economic analysts, however, warn that the pace of inflation in resource-poor Japan is likely to accelerate later this year as more companies are expected to pass on rises in raw materials and labor costs to retail prices.

Solid wage growth and stable price increases are key conditions for the Bank of Japan to continue lifting interest rates as it seeks to normalize its monetary policy after a decade of unorthodox easing that ended in March 2024.

The central bank left the benchmark policy rate unchanged at 1.0 percent at its meeting last month, but Governor Kazuo Ueda signaled more rate hikes, flagging upside risks to inflation and citing factors including the weaker yen, which drives up import costs.

Article source:  https://mainichi.jp/english/articles/20260805/p2g/00m/0bu/017000c