TOKYO, March 7 ------ Japanese workers' real wages shrank in January for the 22nd consecutive month but at the slowest pace in over a year on weakening price pressures, data showed on Thursday.
The country's wages trend is one of crucial data points the central bank watches to gauge pay and inflation outlooks, factors to consider in unwinding its massive stimulus programme.
BOJ Governor Kazuo Ueda has expressed hope that even if real wages don't turn positive immediately, this year's labor-management pay negotiations will yield solid results to boost consumption. Inflation-adjusted real wages, a barometer of consumer purchasing power, slipped 0.6% in January from a year earlier, data from the labor ministry showed, following a revised 2.1% fall in December. The pace of decline was the joint-slowest since December 2022. The consumer inflation rate the government uses to calculate real wages, which includes fresh food prices but excludes rent or equivalent, rose at the slowest pace since March 2022 at 2.5% due to waning cost-push inflation from commodity imports. Despite falling short of outpacing inflation, nominal pay grew at 2.0% year-on-year in January, posting the biggest growth since last June. That followed a revised 0.8% hike in December. The pay bump was attributed to 16.2% advance in special payments reflecting winter bonuses, a labor ministry official said. Regular or base salary in January went up 1.4% year-on-year, the same as a revised figure in the previous month. Overtime pay, an indicator of business activity strength, edged up by 0.4% year-on-year, followed by a revised 1.2% decrease.
Japanese businesses are on the cusp of wrapping up the annual collective pay talk season known as "shunto." The labor unions are demanding pay rises well in excess of last year's hikes, which were the biggest in more than three decades. Core consumer inflation in Japan's capital, a leading indicator of nationwide price trends, exceeded the BOJ's 2% target, the government said on Tuesday. However, an index of stripping out the effect of energy costs slowed in February, shifting the focus on whether Japan can see wage hikes strong enough to underpin consumption.
Source: reuters.com
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