September 7, 2018 / 12:08 AM / 8 months ago

Japan July real wages rise 0.4 percent year-on-year

TOKYO (Reuters) - Japanese workers’ inflation-adjusted real wages rose for the third consecutive month in July, government data showed, in an encouraging sign that consumer spending and inflation will pick up.

FILE PHOTO: A worker cycles near a factory at the Keihin industrial zone in Kawasaki, Japan, November 15, 2017. REUTERS/Toru Hanai/File Photo

The 0.4 percent rise in real wages in July from a year earlier followed a revised 2.5 percent annual increase in June, which was the biggest gain in more than 21 years, labor ministry data showed on Friday.

Summer bonuses boosted real wages in June, so a slowdown was expected in July, but the Bank of Japan is likely to be encouraged that three straight months of gains show upward pressure on wages is finally increasing.

Higher wages suggest it will be easier for the BOJ’s monetary policy to generate sustained inflation.

Nominal cash earnings rose 1.5 percent year-on-year in July, slower than a revised 3.5 percent annual increase in June.

Regular pay, which accounts for the bulk of monthly wages, grew 1.1 percent in July from a year earlier. Special one-off payments, which include summer bonuses, rose an annual 2.2 percent after a revised 6.2 percent annual increase in July.

Overtime pay, a barometer of strength in corporate activity, rose 1.9 percent year-on-year versus an annual 3.5 percent increase in June.

Major Japanese firms typically pay bonuses twice a year, once during the summer and once near year’s end.

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

To view the full tables, see the labor ministry's website at: here

Reporting by Stanley White; Editing by Simon Cameron-Moore

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