Japan’s April Real Wages Post Largest Monthly Gain Since 2010

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FILE PHOTO: FILE PHOTO: People wear protective masks in a shopping district amid the coronavirus disease (COVID-19) outbreak in Tokyo, Japan, December 14 , 2020. REUTERS/Kim Kyung-Hoon/File Photo/File Photo/File Photo

TOKYO ⸺ Japan’s real wages posted the biggest monthly rise in more than a decade in April as overtime pay and compensation of part-timers rebounded, although the gains were inflated due to the comparison with last year’s pandemic-driven fall.

Inflation-adjusted real wages, a key measure of households’ purchasing power, rose 2.1% in April year-on-year to post their largest monthly gain since July 2010, the labour ministry said on Tuesday.

The rise in inflation-adjusted real wages was partly due to a 0.5% drop in the consumer price index, as the health crisis caused prices to weaken, as well as a year-on-year rebound in compensation for part-time workers.

The figures especially underline how big an impact the coronavirus crisis has had on Japan’s economy in the last year, although it is still leaving its mark on economic activity.

Nominal total cash earnings gained 1.6% in April from a year earlier, up for the second straight month, following a 0.6% rise in March, according to the data.

Regular pay – or base salary, which makes up most of total cash earnings and determines a wage trend – rose for the fourth straight month, gaining 0.9%.

Overtime pay, a barometer of strength in corporate activity, jumped 6.4% in April compared the same month a year earlier, posting its first year-on-year rise since August 2019. Special payments rose 8.5% in April.

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.

($1 = 109.4200 yen)

Reporting by Daniel Leussink; Editing by Catherine Evans; Reuters

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