Japan real wages fall for 23rd straight month in February

Japanese workers' real wages fell in February for a 23rd consecutive month, data showed on Monday, suggesting higher prices kept up pressure on consumers' spending appetite. The wage trend is among the key data the Bank of Japan examines for pay and inflation outlooks, crucial factors for the central bank to consider in deciding whether to unwind its stimulus policy further.

Inflation-adjusted real wages, a barometer of consumer purchasing power, fell 1.3 per cent in February from a year earlier, down for 23 straight months, data from the labour ministry showed. It followed a revised decline of 1.1 per cent in January.

The consumer inflation rate the government uses to calculate real wages, which includes fresh food prices but excludes rent or equivalent, grew 3.3 per cent, accelerating from 2.5 per cent in January.

But nominal pay grew at 1.8 per cent in February on the year, for its fastest increase since last June. "We will monitor how growth in nominal pay will develop while price gains are weighing down real wages," a ministry official said.

Japanese firms agreed to raise wages 5.24 per cent this year, the biggest increase in 33 years, a survey by the nation's largest union group Rengo showed last week. Regular or base salary in February grew 2.2 per cent from a year earlier, faster than a revised figure in the previous month, the ministry said.

Special payments, which include bonuses, slipped 5.5 per cent year-on-year after a revised 12.4 per cent gain in January. Last month the BOJ scrapped eight years of negative interest rates and other remnants of its unorthodox policy, in a historic shift away from its focus on reflating growth with decades of massive monetary stimulus.

Here is preliminary data for monthly incomes and number of workers in February: 

Payments (amount) (yr/yr per cent change)

-Total cash earnings 282,265 yen ($1,865.84) +1.8

-Monthly wage 277,479 yen +2.0

-Regular pay 258,319 yen +2.2

-Overtime pay 19,160 yen -1.0

-Special payments 4,786 yen -5.5

Number of workers (million) (yr/yr per cent change)

Overall 50.236 +1.3

-General employees 34.821 +3.5

-Part-time employees 15.415 -3.6

The labour ministry defines "workers" as 1) those employed for more than one month at a company that employs more than five people, or 2) those employed on a daily basis or had less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted, at a company that employs more than five people.