Japan’s nominal wages rose 4.6 percent year on year in September, the largest increase since 1997, labour ministry data released Friday showed. Real wages excluding rent rose 2.2 percent year on year, well above the 1.3 percent consensus among analysts polled.
Wage gains broaden
Base wages climbed 3.7 percent year on year. Wages excluding bonuses, overtime and sampling distortions rose 3.1 percent year on year for full-time workers, a record level. Real wages had risen 1.6 percent year on year in August, so September marked a further acceleration.
Tanaka Yasunari, an analyst at Mitsubishi Research Institute, said wage increases of around 5 percent may be agreed in next year’s talks, similar to 2026, adding that wage growth is becoming widespread. Japan’s largest trade union federation is seeking a wage hike of about 6 percent in next spring’s negotiations, which conclude in March. Persistent labour shortages, visible across almost all industries in the Tankan survey, have also driven bankruptcies: Tokyo Shoko Research counted 240 companies that failed due to labour shortages in the first half of the fiscal year.
BoJ rate path in focus
The Bank of Japan kept its policy rate unchanged the previous week, but more than 80 percent of economists polled by Bloomberg expect a rate hike at the BOJ’s December 18 meeting. BOJ governor Ueda Kazuo said core inflation has roughly reached a level consistent with the 2 percent target.
Analysts expect the current hiking cycle to peak at 1.75 percent, in quarter-point increments, though BNP Paribas and JPMorgan Securities see the rate potentially reaching as high as 2.5 percent. Prime Minister Takaichi Sanae announced last month that fuel subsidies would be phased out from December, while winter utility bill subsidies would be reintroduced.
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Source: Bank of Japan · labour ministry
