FX.co ★ Japan Nominal Wages Rise 1.9% in Sept

In September 2025, Japan experienced a 1.9% year-on-year increase in nominal wages, rising from a 1.5% gain in August and aligning with market expectations, thanks to consistent base pay and a slight uptick in overtime compensation. Nonetheless, this wage growth lagged behind the 3.4% rise in consumer prices, which saw its first acceleration since April. Real wages, which account for inflation and are a crucial indicator of household purchasing power, declined by 1.4% compared to the previous year, marking the ninth consecutive monthly decrease. The Governor of the Bank of Japan, Kazuo Ueda, indicated that the wage outlook for 2026 would play a vital role in determining the timing for resuming monetary tightening. Concurrently, the newly appointed Prime Minister, Sanae Takaichi, emphasized that Japan is still striving to achieve sustainable inflation backed by robust wage growth, indicating her administration's cautious approach towards further interest rate hikes.