TOKYO (Reuters) - Japanese workers’ wages fell in January at the fastest pace in six months after adjustments for inflation in a worrying sign that consumer spending will lose momentum this year.
Falling real wages suggest the government will struggle to convince companies to raise wages by 3 percent or more this year at annual negotiations with labour unions, which are expected to conclude next week at large companies.
The fall in real wages also shows the Bank of Japan’s 2 percent inflation target is likely to remain a distant goal.
Real wages in January fell 0.9 percent from the same period a year ago, labour ministry data showed on Friday. That followed a 0.3 percent annual decrease in December and marked the biggest decline since a 1.1 percent annual decrease in July 2017.
Nominal cash earnings in January rose 0.7 percent from the same period a year earlier, slower than a 0.9 percent annual increase in the previous month, the data showed.
Special payments, which include bonuses, in January rose 9.3 percent on year, following a 1.0 percent annual increase in December.
Overtime pay, a barometer of strength in corporate activity, was unchanged in January from the same period a year ago, versus a 0.6 percent annual increase in December.
At a two-day meeting ending later on Friday, the BOJ is widely expected to maintain its massive stimulus programme and projection that the economy is headed for a moderate expansion..
Falling real wages suggest the central bank’s attempts to achieve higher inflation continue to struggle after almost five years of massive money printing.
To view the full tables, see the labour ministry's website at: here
Reporting by Stanley White; Editing by Jacqueline Wong