FX.co ★ Japan Nominal Wage Growth Hits 4-Month High

In June 2024, Japan experienced a 2.5% year-on-year increase in nominal wages, marking the swiftest growth in four months, albeit short of the anticipated 3.2% rise. Conversely, real wages, adjusted for inflation, which are crucial for evaluating consumer purchasing power, fell by 1.3%, following a previous decline of 2.6% in May. This represents the sixth consecutive month of declining real wages, as inflation continues to surpass wage growth, raising concerns about consumer expenditure. Although major Japanese corporations committed to wage increases averaging over 5% during this year's spring negotiations, the full effects may not be reflected in official wage statistics until later in the summer, particularly as smaller enterprises tend to implement salary increments at a slower pace. Concurrently, a panel from the labor ministry has recommended a 6% increase in the national average minimum wage for the current fiscal year, marking the most significant hike since at least 2002.