Japan’s June real wages rise for first time in nearly two years

TOKYO :Japan’s inflation-adjusted real wages rose in June for the first time in more than two years as nominal pay gained at the fastest pace in nearly three decades, data showed, backing the central bank’s view that wage increases are broadening.
However, household spending fell more than expected in the same month, clouding the outlook for the Bank of Japan’s plan to steadily raise interest rates.
The latest market rout, which came in the wake of the BOJ’s decision last week to raise interest rates, may also dampen consumer sentiment, some analysts say.
Real wages grew 1.1 per cent in June, rising for the first time in 27 months, after a revised 1.3 per cent drop in May, data from the labour ministry showed on Tuesday.
Nominal wages, the average total cash earnings per worker, grew 4.5 per cent, the fastest pace of growth since January 1997, to 498,884 yen ($3,480), the data showed.
Regular pay for permanent workers rose 2.7 per cent in June after a revised 2.6 per cent gain in May, a sign the bumper pay hikes offered by firms in this year’s wage negotiations are pushing up household income.
But separate data released on Tuesday showed household spending fell 1.4 per cent in June from a year earlier, more than a median market forecast for a 0.9 per cent drop, suggesting that rising living costs are discouraging consumers from boosting spending.
($1 = 143.3800 yen)