Japan’s economic data delivered a familiar combination of improving nominal pay but still-depressed real incomes. Real wages fell -0.7% yoy in October, the 10th consecutive decline, though the rate of contraction moderated for the second month. Officials highlighted that fewer part-time roles and a higher share of full-time employees—who earn more—helped support headline income levels. Yet inflation of 3.4% yoy, driven mainly by food prices, continued to outpace wage gains.
Nominal earnings were considerably stronger, rising 2.6% yoy and beating forecasts for 2.2%. That marks a three-month high and extends the run of increases to 46 straight months, giving policymakers some evidence that wage momentum is holding up. Regular pay also expanded a robust 2.6% yoy, while bonus-driven special payments surged 6.7% yoy, providing a further boost. strain, limiting the lift to consumption.
The bigger disappointment came from growth data. Japan’s Q3 GDP was revised down to -2.3% annualized, from the initial -1.8%, making it the weakest quarter since 2023.
