TOKYO - Japan's real wages in August rose 1.5 percent from a year earlier, climbing for the eighth straight month, reflecting pay growth and a slower increase in prices, government data showed Wednesday.
Nominal wages per worker, including base and overtime pay, were up 3.8 percent at 311,364 yen ($1,970), marking the seventh straight month of growth exceeding 3 percent and the first such streak in more than 34 years, according to the Ministry of Health, Labor and Welfare.
The eight-month streak of increases in the country's real wages was the longest since a 12-month run from February 2016 to January 2017, the ministry said.
However, the latest rise was slower than the increases in the 2 percent range recorded in June and July. Whether real wages will continue to grow remains uncertain as food price increases persist and government subsidies for electricity and gas bills ended with September usage.
Consumer prices used to calculate the pay data rose 2.2 percent in August, slowing from 3.1 percent a year earlier, as falling rice prices and government subsidies for gasoline, electricity and gas helped curb inflation.
Inflation remained in the 1 percent range from January through June before rising to the 2 percent range in July and August.
The recent pay increases came after Japan saw real wages drop for 12 straight months from January 2025.
According to data released by the Japan Business Federation, the country's largest business lobby known as Keidanren, major companies agreed during spring negotiations to raise wages by 5.37 percent on average, surpassing 5 percent for the third straight year.
Solid wage growth and robust consumption are key conditions for the Bank of Japan to continue raising interest rates as it seeks to normalize monetary policy after a decade of unorthodox easing that ended in March 2024.
The central bank lifted its key policy rate to a 31-year high of 1.25 percent last month and signaled further hikes could be on the way, with Governor Kazuo Ueda saying monetary policy has entered a different phase requiring accelerating inflation to be kept in check.
