June 6, 2018 / 12:02 AM / 12 days ago

Japan April real wages unchanged in blow to consumer spending

TOKYO (Reuters) - Japanese workers’ inflation-adjusted real wages showed no growth in April from the same period a year earlier in a sign that consumer spending could lose momentum.

FILE PHOTO: Commuters walk under umbrellas in Osaka, western Japan, October 22, 2017. REUTERS/Thomas White/File Photo

That follows a downwardly revised 0.7 percent annual increase in real wages in March, which suggests that the government’s repeated efforts to encourage private-sector wage gains have fallen flat.

Growth in March was the first in four months, which had fueled optimism that a gradual rise in workers’ salaries would stimulate consumer spending in Japan.

The data could be discouraging for the Bank of Japan as it struggles to accelerate inflation to its 2 percent price target.

The real wage data follows weak readings on household spending and industrial production, which have cast doubt on whether the economy can bounce back from a contraction in the first quarter.

Nominal cash earnings rose 0.8 percent year-on-year in April, slower than a downwardly revised 2.0 percent annual gain in March, data showed on Wednesday.

Regular pay, which accounts for the bulk of monthly wages, grew 1.2 percent in the year to April, matching the annual increase in the previous month.

Overtime pay, a barometer of strength in corporate activity, rose an annual 1.9 percent in April versus an upwardly revised 2.2 percent year-on-year increase in March.

Reporting by Stanley White; Editing by Jacqueline Wong

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