FX.co ★ Japan Nominal Wage Growth Misses Forecasts

In November 2025, Japan experienced a nominal wage growth of only 0.5% year-over-year, a significant deceleration from the 2.5% increase seen in October and falling short of market expectations of 2.3%. This represents the slowest wage growth rate in nearly four years, primarily attributed to a substantial 17% year-on-year decline in one-off bonus payments. These bonuses tend to be erratic outside of peak distribution periods, and government officials have noted that preliminary data for November often underrepresents actual earnings, as many winter bonuses are yet to be accounted for. Concurrently, inflation-adjusted real wages, which are a crucial indicator of household purchasing power, dropped by 2.8% compared to the previous year, marking the most significant decline since January. Consumer prices increased by 3.3% in November, far outstripping wage growth and further diminishing real incomes. This widening disparity between wages and inflation complicates the Bank of Japan's policy considerations, as policymakers have indicated that any additional monetary tightening would be contingent upon sustained, widespread wage improvements.