Japanese real wages in September fell 1.4% y/y, down for the ninth month in a row

Japan’s inflation-adjusted real wages fell for the ninth straight month in September, underscoring the persistent squeeze on household purchasing power and complicating the Bank of Japan’s path toward further rate hikes. Government data showed real wages declined 1.4% year-on-year, following a revised 1.7% fall in August, as inflation once again outpaced nominal pay gains.

Total cash earnings rose 1.9% to an average of ¥297,145 ($1,971), driven by steady base salaries and a modest uptick in overtime pay. However, that growth lagged behind the 3.4% rise in consumer prices — the first acceleration in inflation since April.

• Regular pay increased 1.9%,
• Overtime pay, a key gauge of corporate activity, climbed 0.6%.
• Special payments such as bonuses rebounded 4.5% after a sharp August drop, though they remain volatile outside Japan’s traditional summer bonus season.

—

Background to all this:

• BOJ Governor Kazuo Ueda says that the 2026 wage outlook will be pivotal for determining when to resume tightening.
• Japan’s largest labour federation, Rengo, has set a goal of “5% or more” for next spring’s wage negotiations after securing a 5.25% average hike this year — the biggest in 34 years.
• New Prime Minister Sanae Takaichi this week reiterated that Japan has yet to achieve sustainable inflation backed by robust wage growth, suggesting her government favours a cautious approach to further rate increases.

This article was written by Eamonn Sheridan at investinglive.com.