Japan Real Wages Rise for Eighth Straight Month

The Government of Japan reported that real wages increased by 1.5% in August compared to the previous year, marking the eighth consecutive month of growth. Average nominal wages rose 3.8% to 311,364 yen, with base salaries increasing by 3.8% and overtime pay growth accelerating to 5.2%.

Despite the growth, the pace of real pay recovery slowed from the revised 2.0% gain recorded in July. Officials attributed this deceleration partly to a lack of growth in special one-time bonus payments. The inflation rate used for the real wage indicator remained steady at 2.2%.

This sustained wage recovery coincides with September core inflation in Tokyo reaching a 10-month high. Together, these economic indicators strengthen the case for the Bank of Japan to implement additional interest rate hikes following its benchmark rate increase last month.