Japan’s real wages in July rose 0.4 percent from a year earlier, marking the second consecutive monthly increase, government data showed on Thursday. The labor ministry attributed the sustained expansion in real wages to more companies paying bonuses compared to July 2023. However, the slowdown in real wage growth was primarily due to more companies paying bonuses in June than in July.
Boosted by summertime bonus payments, nominal wages in Japan, the average monthly cash earnings per worker including base pay, overtime, and bonuses, grew 3.6 percent to 403,490 yen ($2,800). This marks the 31st straight month of increase, the ministry of health, labor and welfare reported.
Japan’s base wages, or regular pay, rose 2.7 percent, marking the fastest pace of increase in nearly 32 years. Meanwhile, special payments, largely reflecting bonuses, rose 6.2 percent to 118,807 yen in July. In addition, overtime and other allowances declined 0.1 percent to 19,590 yen.
Real, inflation-adjusted wages rose at a slower pace than June’s 1.1 percent growth when they turned positive for the first time in 27 months amid rising consumer prices, the ministry noted.
Data on wages determines how soon the Bank of Japan could raise interest rates. The central bank’s governor Kazuo Ueda said broad-based increases in pay must accompany rising prices for inflation to sustainably meet the central bank’s 2 percent target.
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