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Japan April real wages fall at quickest pace since December

FILE PHOTO: A worker cycles near a factory at the Keihin industrial zone in Kawasaki, Japan February 17, 2016. REUTERS/Toru Hanai

TOKYO (Reuters) - Japan’s April inflation-adjusted real wages fell at their fastest pace since December, government data showed on Tuesday, fanning fears about the outlook for consumer sentiment after the economy took a hit from the new coronavirus outbreak.

The world’s third-largest economy slipped into recession - marked by two quarters of negative growth - in the March quarter after the pandemic hurt demand at home and abroad.

Real wages, a gauge of household purchasing power, fell 0.7% in April from a year earlier, labour ministry data showed, dropping for the second straight month.

The monthly wage data showed nominal total cash earnings dropped 0.6% in the year to April, seeing their largest fall since July last year.

One-off special payments advanced 10.6% in April after an upwardly revised 0.5% gain in March. Regular pay - or base salary, which makes up most of total cash earnings - was flat, the data showed.

Overtime pay, a barometer of strength in corporate activity, slumped 12.2% in April from a year earlier, down for an eight straight month.

The ministry defines “workers” as 1) those who were employed for more than one month at a company that employed more than five people, or 2) those who were employed on a daily basis or had less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted, at a company that employs more than five people.

Reporting by Daniel Leussink; Editing by Hugh Lawson

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