Japan's real wages in July rise 2.4% on year, up for 7th straight month

Japan's real wages increased by 2.4 percent in July compared to the previous year, marking the seventh consecutive month of growth, according to government data released on Tuesday. Nominal wages per worker, encompassing base and overtime pay, surged 4.7 percent to 436,401 yen ($2,830), representing the sixth straight month of wages growing by more than 3 percent and the first such streak in over 34 years, stated the Ministry of Health, Labor and Welfare.

This continuous rise in real wages signaled the longest positive trend since a seven-month period in February 2021. The ministry official attributed this increase to the effects of wage hikes from the shunto labor-management negotiations. Wage growth was propelled by a 6.3 percent rise in special earnings to 134,819 yen, as this year's robust wage negotiations put pressure on corporate managers to increase salaries.

The latest wage increase occurred as core consumer prices have been declining, fluctuating between 1-2 percent compared to the 3-4 percent range from the prior year, reflecting a decrease in the cost of rice and government subsidies to cap gasoline prices due to heightened tensions in the Middle East. However, a recent survey by Japanese research firm Teikoku Databank forecasted that the prices of over 4,900 food and beverage items in the country would rise this month, primarily due to increased costs for packaging materials, potentially leading to higher household expenses. The recent pay increases came after Japan experienced a 12-month decline in real wages.