Japan’s real wages rise 2.2% in September

Japan’s real wages rose 2.2% in September from a year earlier, government data released November 6 showed. The ninth consecutive monthly increase followed a revised 1.6% rise in August. Real wages adjust cash pay for inflation and indicate how much workers can buy with their earnings.

Average nominal wages, or total cash earnings before adjusting for inflation, rose 4.6% to 311,409 yen (about $2,000). It was the fastest increase since January 1997, up from August’s revised 3.9%, CNA reported.

What drove the figures

Special payments, made up mostly of one-time bonuses, jumped 32.6% from a year earlier, reflecting a statistical quirk rather than a rise in bonuses or other payments, the labor ministry said.

A ministry official said a steady rise in base salaries during the year helped improve real wages. Base pay rose 3.7% in September, compared with 3.8% in August, while overtime pay increased 3.6%, down from a revised 4.9% in August. The inflation measure used to calculate real wages rose to 2.4% from 2.2% in August, remaining below its year-earlier level of 3.4%.

Interest-rate forecasts

The Bank of Japan raised interest rates to a 31-year high in September and signaled that further increases could follow as it shifted its focus toward preventing inflation from overshooting its target. Its policy rate stood at 1.25% on 16 October.

In an October 16 account of brokerage forecasts, J.P. Morgan, Morgan Stanley and Nomura each forecast, without a commitment from the central bank, an increase of 25 basis points, or 0.25 percentage point, in December 2026.