TOKYO (Reuters) – Japan's inflation-adjusted real wages fell for a fourth straight month in November, dragged down by rising prices even as the basic wage grew at the fastest pace in more than three decades, government data showed on Thursday.
The Bank of Japan takes into account various risks when determining the timing of raising interest rates, and the central bank has repeatedly said that sustained broad-based wage increases are a prerequisite for raising borrowing costs.
Data from the Labor Department showed that inflation-adjusted real wages, a measure of consumers' purchasing power, fell 0.3% in November from a year earlier, falling for the fourth month in a row. The October reading was revised unchanged to a decrease of 0.4%.
The consumer inflation rate, which the government uses to calculate real wages and includes fresh food prices but not rent or equivalents, rose 3.4% from a year earlier, accelerating from 2.6% growth in October, reflecting rising inflationary pressures.
The data showed that base salary, or regular pay, rose 2.7% in November, marking the fastest increase since 1992, after major companies agreed to raise wages in spring wage negotiations.
Overtime wages, a measure of business strength, rose 1.6% during the month from a revised 0.7% increase in October. Special payments, mainly one-time volatile bonuses, rose 7.9% in November, after a revised 2.2% decline in October.
the total Cash earnings, or nominal wages, increased 3.0% to 305,832 yen ($1,935.03) during the month, the data showed.
Large Japanese companies are likely to raise wages by about 5% in 2025, the same level as last year, the head of a major business lobby said on Tuesday, while pledging efforts to spread the momentum of wage growth to smaller companies.
Prime Minister Shigeru Ishiba's government has put wage increases at the top of its policy agenda, with Ishiba promising to push for wage growth in negotiations this spring.
In talks last year, Japanese companies achieved their biggest pay rise in 33 years.
($1 = 158.0500 yen)
