Japan’s real wages rise for eighth straight month in August

Japan's real wages increased for the eighth consecutive month in August, with a 1.5% rise from a year earlier, according to government data released on Wednesday. The steady wage growth supports the Bank of Japan's case for continuing interest rate hikes after raising its benchmark rate in the previous month. While average nominal wages rose 3.8% to 311,364 yen, this was slower than the revised 4.3% increase in July.

Base salaries increased by 3.8%, remaining unchanged from a 3.8% rise in July, while overtime pay growth accelerated to 5.2% from July's revised 4.5%. However, special payments, primarily one-time bonuses, showed no growth in August compared to a 5.3% increase in July. The inflation rate used for calculating the headline real wage indicator remained steady at 2.2%, below the year-earlier level of 3.1%.

Meanwhile, September's core inflation in Japan's capital surged at its fastest pace in 10 months, indicating growing price pressures and further supporting the central bank's potential for additional interest rate increases.

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