FX.co ★ Japan Nominal Wages Rise More Than Expected

In October 2025, nominal wages in Japan experienced a 2.6% year-on-year increase, marking the most substantial rise in three months and surpassing market forecasts of 2.2%. Despite this, wage growth remained insufficient to keep up with price hikes for the tenth consecutive month, as inflation outpaced pay increments. Real wages, which are a critical measure of household purchasing power, saw a decrease of 0.7% compared to the previous year due to a 3.4% rise in living costs, consequently reducing workers' disposable income. There were modest gains in base salaries and overtime pay, while special bonuses surged by 6.7%. However, such bonuses are typically seasonal and may not provide a consistent income boost. This situation intensifies the pressure on the Bank of Japan as it approaches its December policy meeting, with growing speculation that policymakers might consider an additional rate increase.