Japan Oct wages show 32-year-high base pay growth, positive for BOJ hike
2024.12.05 18:59
TOKYO (Reuters) – Japan’s base salary grew at a 32-year-high pace in October, government data showed on Friday, boosting real wages after two months of decreases and offering statistical support for the prospects of a central bank rate hike this month.
The Bank of Japan must scrutinise various data at its Dec. 18-19 rate review, dovish board member Toyoaki Nakamura said on Thursday, as the market remains split about the timing of Japan’s next interest rate hike between December and January.
Base salary, or regular pay, rose 2.7% in October, marking the fastest increase since November 1992, labour ministry data showed, as more companies set higher salaries after major firms agreed to an average 5.1% raise at the spring wage talks.
Overtime pay, a barometer of business strength, rebounded to 1.4% growth from a revised 0.9% decrease in the previous month.
Combined, nominal wages, or a worker’s average total cash earnings, grew 2.6% to 293,401 yen ($1,955) in October.
The inflation rate the ministry uses for wage calculation, which excludes owners’ equivalent rent, was also at 2.6%, its slowest in nine months.
That led the inflation-adjusted real wages, a key indicator of consumers’ purchasing power, to stay unchanged in October from a year before, against a revised 0.4% drop in September and 0.8% decline in August.
Opposition lawmakers had pressed the government and the BOJ to aim for positive real wage growth after the ruling bloc lost its lower house majority at the October general election.
BOJ Governor Kazuo Ueda last week told the newspaper in an interview that the timing of the next interest rate hike was “approaching” as the economy was moving in line with the central bank’s forecasts.
Meanwhile, Jiji news agency reported on Wednesday that a cautious view toward an early hike was growing among BOJ policymakers, adding to uncertainty around the chance of a December hike.
($1 = 150.1500 yen)
