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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
JAPAN DATA
Japan July labor earnings data was much stronger than expectations. Headline labor cash earnings were +3.6% y/y versus 2.9% forecast, although we were down on the June outcome of 4.5%. Real cash earnings were +0.4%y/y, versus -0.6% forecast, prior was +1.1%. On a same sample base, cash earnings were 4.8%y/y, against a 3.2% forecast (prior 5.1%). Full-time pay, same base y/y, was 3.0%y/y, versus 2.8% forecast and 2.7% prior.
- Despite some loss of y/y momentum versus June, the July data should raise BOJ confidence in the wages backdrop. Real wages were positive in y/y terms for the second straight month, the first time this has happened since early 2022. Nominal earnings remain very elevated by historical standards. The chart below overlays real labor earnings (the orange line) against household spending. This points to firmer spending outcomes as we progress through Q3. this is a key watch point for the BoJ
- In terms of the detail, contracted and scheduled earnings were mostly firmer in y/y terms. Payments related to overtime were weaker, down in y/y terms. Employment edged up to 1.2% y/y, while hours worked was +0.6%y/y (versus -3.1% in June).
Fig 1: Japan Real Earnings Should Aid Firmer Consumer Spending Backdrop
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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