TOKYO :Japanese workers saw real wages fall for the eighth straight month in August, with a double-digit decrease in one-off compensations on top of relentless inflation outpacing nominal pay growth, government data showed on Wednesday.
Inflation-adjusted real wages, a key barometer of Japanese households’ purchasing power, fell 1.4 per cent in August from a year earlier, according to labour ministry data.
That was the fastest decrease in real pay in three months and followed a 0.2 per cent drop in July, which was a result of a downward revision from what initially appeared to be its first rise since December 2024.
Consumer inflation has been at or above the Bank of Japan’s 2 per cent target for more than three years, but in recent months it has been decelerating, complicating the central bank’s rate hike plans.
The consumer inflation rate the labour ministry has used to calculate real wages, which includes fresh food prices but not rent costs, rose 3.1 per cent year-on-year in August, the lowest in 10 months.
But that was enough to outpace nominal wages, or total cash earnings, which rose 1.5 per cent to 300,517 yen ($1,994) in August, the slowest increase in three months.
Although regular pay or base salary rose 2.0 per cent, around the same pace as in the previous four months, special payments were down 10.5 per cent, likely because some firms could not offer as much summer bonuses as last year, a labour ministry official said.
However, most companies pay summer bonuses to their workers in June and July, so August’s special payment tally tends to be volatile, the official added.
Overtime pay, a gauge of strength in corporate activity, rose 1.3 per cent in August, down from a revised 3.0 per cent growth in July.
After keeping interest rates unchanged at last month’s meeting, BOJ officials have repeated a view that wage hike trends would continue toward next year, while the impact of U.S. tariffs on Japanese business was still uncertain.
($1 = 150.6900 yen)
