Japan March real wages down for third month, overtime pay falls

CNA

08-05-2025

TOKYO :Japanese real wages decreased for a third consecutive month in March against the background of relentless inflation, while overtime salaries fell at the fastest pace in almost a year, government data showed on Friday.
The pay data will add to worries over Japan's growth outlook, alongside tariff threats and uncertainty over monetary policy, ahead of a first-quarter gross domestic product announcement next week. Economists are expecting a contraction.
Inflation-adjusted real wages, a key determinant of households' purchasing power, dropped 2.1 per cent in March from a year earlier following a revised 1.5 per cent fall in February and a 2.8 per cent decline in January, labour ministry data showed.
The consumer inflation rate the ministry uses to calculate real wages, which includes fresh food prices but not rent costs, rose 4.2 per cent year-on-year in March, slightly easing from February's 4.3 per cent gain but still at elevated levels due to rising food costs.
Regular pay, or base salary, grew 1.3 per cent in March, the same pace as in February after a downward revision. But overtime pay fell 1.1 per cent, following February's revised 2.4 per cent growth, indicating a potential softening in business activity.
It marked the first dip in overtime pay since September, and the decrease was the sharpest since April last year.
Total average cash earnings, or nominal pay, increased 2.1 per cent to 308,572 yen ($2,132) in March, which was slower than a revised 2.7 per cent rise in the previous month.
In March, major Japanese firms on average agreed to more than 5 per cent pay hikes during annual spring wage talks, but the effect of such raises typically begins to show up in the government's wage data for April or later.
($1 = 144.7500 yen)