In Japan, real wages fell notably by -2.5% yoy in March, marking a worsening trend from the previous month’s -1.8% yoy. It also extended the streak of declines to 24 consecutive months—the longest since such data was first recorded in 1991.
Nominal wages, which include total cash earnings, grew modestly by 0.6% yoy in March, a deceleration from February’s 1.4% yoy increase. Although regular pay saw a rise of 1.7% yoy , this was offset by -1.5% yoy decline in overtime pay, which has fallen for four consecutive months. Furthermore, special payments, which encompass bonuses and other benefits, saw a sharp decrease of -9.4% yoy.
The persistence of wage declines occurs despite a seemingly favorable outcome from Japan’s annual labor-management wage talks this spring, which were described as the most beneficial for workers at major companies in three decades.
However, a labor ministry official noted that the results of the “shunto” wage negotiations were not reflected in the March data. With these results expected to influence the figures from April onwards, there is a focus on whether real wages will show an improvement and turn positive for the first time in two years.
