Japan’s real wages fell sharply in November, dropping -2.8% yoy, marking the 11th consecutive month of decline and the steepest fall since last January. Inflation-adjusted earnings were hit as a 3.3% rise in consumer prices more than offset a modest increase in nominal pay.
Nominal wages rose just 0.5% yoy, far below expectations of 2.3% and a sharp slowdown from October’s 2.5% pace. While nominal pay has now risen for 47 straight months, the latest reading marks the weakest growth since December 2021.
The softness was driven largely by a -17.0% drop in special earnings, mainly volatile one-off bonuses outside the usual summer and winter payment periods. More concerning for the underlying trend, regular pay growth eased from 2.4% yoy to 2.0%. Overtime pay slowed from 2.1% to 1.2%, pointing to waning momentum in private-sector income growth and continued pressure on household purchasing power.
