Japan real wages fall for 5th month in August as weak yen fuels inflation

TOKYO (Reuters) – Japan’s real wages fell in August for a fifth straight month, government data showed on Friday, as a plunge in the yen lifted consumer prices at the fastest pace in eight years, outstripping modest pay growth.

While the Bank of Japan maintains massive monetary easing, policymakers are urging firms to raise wages to kick-start a sustainable growth cycle of higher wages and greater consumer and business spending while easing the pain of inflation that has been amplified by the currency’s slide to a 24-year low.

Inflation-adjusted real wages dropped 1.7% in August from a year earlier, labour ministry data showed, following a revised 1.8% fall in the prior month.

The consumer price index (CPI) used by the ministry to calculate real wages, which includes fresh food prices but excludes owners’ equivalent rent, rose by an annual 3.5%.

That was the fastest since the 3.9% recorded in Sept. 2014 and outpaced a 1.7% rise in nominal total cash earnings following a revised 1.3% gain in July.

Overtime pay, a key indicator of strength in corporate activity, increased 4.3% in August from a year earlier, the smallest gain in five months.

Special payments, which include the discretionary seasonal bonuses that firms tend to slash when they face headwinds, rose 0.7% in August after a 1.6% increase the previous month.

The following table shows preliminary data for monthly incomes and numbers of workers in August:

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Payments (amount) (yr/yr % change)

Total cash earnings 279,388 yen ($1,930) +1.7

-Monthly wage 266,404 yen +1.8

-Regular pay 247,926 yen +1.6

-Overtime pay 18,478 yen +4.3

-Special payments 12,984 yen +0.7

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

Overall 51.607 +1.1

-General employees 35.309 +0.8

-Part-time employees 16.298 +1.9

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The ministry defines “workers” as 1) those who were employed for more than one month at a company that employed more than five people, or 2) those who were 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 = 144.7300 yen)

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