Japan’s real wages extend gains, consumer spending decline slows in April
FILE PHOTO: Pedestrians cast shadows as they make their way at a financial district in Tokyo, Japan, January 26, 2017. Picture taken on January 26, 2017. REUTERS/Kim Kyung-Hoon/File Photo
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TOKYO, June 5 : Japan’s real wages climbed 1.9 per cent in April from a year earlier, government data showed on Friday, marking a fourth consecutive monthly gain, as higher special payments boosted overall earnings and improved household purchasing power.
Here are a few details:
• The Bank of Japan, which will next review its interest rates on June 15 and 16, considers steady rises in wages and prices as a prerequisite for another hike. The Japanese central bank is expected to raise interest rates this month unless a sharp escalation in the Middle East conflict roils markets, sources told Reuters.
• Special payments, consisting mostly of one-time bonus payments, jumped 7.4 per cent in April after a revised 0.7 per cent fall for March.
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• A labour ministry official said, in addition to the boost from special payments, steady growth in nominal wages and easing inflation have helped lift real wages.
• Average nominal wages (total cash earnings) rose 3.5 per cent year-on-year to 312,425 yen ($1,953.88), marking the fastest growth since December 2024. This followed a revised 3.1 per cent increase in March, and represents the first time in over 34 years that wage growth has exceeded 3 per cent for three consecutive months.
• The inflation rate, used by the ministry to calculate the headline real wage indicator, eased to 1.5 per cent in April from a 1.6 per cent gain in March, staying below the BOJ’s 2 per cent target for a fourth consecutive month.
• Consumer inflation in Japan has been easing as government subsidies offset rising import costs from a weak yen, as well as surging oil prices due to the Iran war.
• Workers’ base salaries, or regular pay, grew 3.4 per cent in April, unchanged from the revised figure in the previous month. Base pay for full-time workers grew more than 3 per cent for a fourth consecutive month.
• Overtime pay rose 4.2 per cent in April, up from a revised 3.1 per cent gain in March.
• Meanwhile, Japanese household spending fell less than expected in April from a year earlier, internal affairs ministry data showed, extending a decline streak to five straight months.
• Consumer spending dipped 0.5 per cent year-on-year, beating the median market forecast for a 1.5 per cent drop and posting the smallest decline in five months.
• On a seasonally adjusted, month-on-month basis, spending grew 1.6 per cent versus an estimated 0.8 per cent rise.
($1 = 159.9000 yen)
Source: Reuters
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