Japan's real wages declined for the eleventh straight month in February weighing heavily on household spending, data from the Ministry of Health, Labor, and Welfare showed Friday.
Inflation adjusted real wages decreased 2.6 percent annually, but the pace of decline slowed from the 4.1 percent drop in January. Real wages have been falling since April 2022.
Nonetheless, total cash earnings increased 1.1 percent on a yearly basis in February, faster than the 0.8 percent climb in January. This was also better than economists' forecast of 0.9 percent gain.
Overtime pay of employees logged an annual growth of 1.7 percent but slower than the forecast of 2.0 percent increase.
Official data released earlier today showed that household spending was up 1.6 percent in February following the 0.3 percent contraction in January.
Japanese Prime Minister Fumio Kishida had urged business leaders to hike salaries to help employees to fight high cost of living. Many large companies are planning to lift salaries by more than 3 percent this year, which is likely to lift wage growth. The Bank of Japan continued to maintain an ultra-loose monetary policy under the leadership of Haruhiko Kuroda. Markets expect a change in the strategy after Kazuo Ueda takes office next week.
