Japan April real wages extend falls as consumer inflation weighs

TOKYO (Reuters) – Japan’s real wages fell for the 13th straight month in April, government data showed on Tuesday, indicating wage recovery remained slow amid persistent gains in consumer inflation.

Japan’s major firms in March agreed to offer the largest wage increases in three decades during negotiations with unions, as they faced pressure to compensate employees for higher living costs. However, Tuesday’s data suggests it will take some time for that wage hike to be felt.

Bank of Japan Governor Kazuo Ueda has stressed the need to keep ultra-loose policy to achieve the central bank’s 2% inflation target in a sustainable and stable fashion, accompanied by wage increases.

Inflation-adjusted real wages, a barometer of households’ purchasing power, dropped 3.0% in April from a year earlier, a faster decline than a revised 2.3% fall in March.

The consumer price index the ministry uses to calculate real wages, which includes fresh food prices but excludes owners’ equivalent rent, rose 4.1% in April from a 3.8% increase in March.

The growth in the inflation index weighed on real wages.

Total cash earnings, or nominal wages, rose 1.0% year-on-year in April, slightly slower than a revised 1.3% gain in March.

Overtime pay, a gauge of business activity, dipped 0.3% in April from a year earlier, after a revised 1.2% growth in the previous month.

Special payments edged up 0.2% in April, after a revised 11.6% gain in March.

The table below shows preliminary data for monthly incomes and number of workers in April:

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Payments (amount) (yr/yr % change)

Total cash earnings 285,176 yen ($2,033) +1.0

-Monthly wage 273,554 yen +1.1

-Regular pay 253,855 yen +1.1

-Overtime pay 19,699 yen -0.3

-Special payments 11,622 yen +0.2

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Number of workers (million) (yr/yr % change)

Overall 51.987 +1.7

-General employees 35.669 +1.3

-Part-time employees 16.318 +2.4

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The labour ministry defines “workers” as 1) those employed for more than one month at a company that employed more than five people, or 2) those employed on a daily basis or had less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted, at a company that employs more than five people.

To view the full tables, see the labour ministry’s website at:

($1 = 140.2600 yen)

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