Japan July Wages Slip on Lower Bonuses, Gradual Uptrend Intact

--Japan July Avg Wages -0.3% Y/Y, 1st Drop in 14 Months

--Japan July Wages May Be Revised Up When More Data Added

--Japan July Real Avg Wages -0.8% Y/Y, 2nd Straight Drop

--Japan July Base Wages +0.5% Y/Y, 4th Straight Rise

--Japan July Overtime Pay +0.1% Y/Y, 1st Rise in 2 Months

--Japan July Special Pay -2.2% Y/Y, 1st Drop in 6 Months

     TOKYO (MNI) - Preliminary average wage data from the Monthly Labour Survey

released by the Ministry of Health, Labour and Welfare on Wednesday.

     * Total monthly average cash earnings per regular employee in Japan fell

0.3% on year to Y371,808 in July, posting the first year-on-year drop in 14

months after rising 0.4% in June, but the gradual uptrend remains intact. The

decrease was caused by a preliminary decline in summer bonuses and continued

weak overtime pay. But "special pay" including bonuses may be revised up sharply

when data from more surveyed firms are added later, as was the case for June.

     * In real terms, average wages slumped 0.8% on year, the second straight

drop after falling 0.1% in the previous month. The weak trend was caused by the

recent rise in the cost of living, with the total CPI minus imputed rents up

0.6% on year in July, amid slow base wage hikes.

     * Base wages, the key to a recovery in cash earnings, rose 0.5% in July

from a year earlier, the fourth consecutive year-on-year rise, but the pace of

increase slowed from the recent high of +0.7% in May. Hourly base wages of

regular employees working part time gained 2.9% on year after +3.0% in the

previous month while base wages for full-time workers rose just 0.3% on year

after +0.4% in June.

     * Overtime pay rose 0.1% on year in July after falling 0.1% in June, the

first rise in two months. Overtime working hours rose 0.6% on year for the

seventh straight rise after +0.7% in June while regular working hours fell 0.7%

on year, the first drop in three months after being flat in the previous month.

     * Bonuses and other special pay fell 2.2% from a year before in July. It

was the first drop in six months after +0.4% the previous month. In June, this

category of cash earnings fell a preliminary 1.5% but was revised up sharply to

a 0.4% increase.

     * Japanese policymakers have been urging firms to share more profits with

workers but firms remain cautious about raising base wages amid uncertainty over

the outlook for global and domestic demand.

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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