Japan’s real wages declined by -0.6% yoy in August, marking the first drop in three months. Nominal wages rose for the 32nd consecutive month, increasing by 3.0% yoy, slightly missed market expectations of 3.1% .
The wage growth was not enough to offset inflationary pressures. The CPI used to calculate real wages, which includes fresh food prices but excludes owners’ equivalent rent, surged by 3.5% yoy in August, the highest increase since October 2023.
On a positive note, base wages (excluding bonuses and overtime) saw a significant 3.0% yoy increase, the largest rise in nearly 32 years. Overtime pay grew by 2.6% yoy. However, these gains were still outpaced by inflation.
In other data, household spending fell -1.9% yoy in August, but the decline was less severe than the market’s expected drop of -2.6%.
