Japan’s labor market showed a notable slowdown in nominal cash earnings growth in November, increasing by only 0.2% yoy, which was significantly below market expectation of 1.5% yoy. This rate marks the slowest growth in nearly two years and represents a considerable decrease compared to 1.5% yoy growth in October.
A closer look at the components of earnings reveals mixed trends. Regular or base salaries saw modest increase of 1.2% yoy, slightly down from previous month’s 1.3% yoy. Overtime pay, which had been declining, showed a positive shift with 0.9% yoy increase, marking the first rise in three months. However, special payments, such as bonuses, experienced a significant drop of -13.2% yoy.
More concerning that real wages fell sharply by -3.0% yoy in November, exceeding expectations of -2.0% yoy decline. This drop marks the 20th consecutive month of contraction.
