MNI BRIEF: Japan Apr Wages Rise, Real Pay Stays Negative

Inflation-adjusted real wages, a barometer of household purchasing power, fell by 3% y/y in April following a 2.3% fall in March due to higher consumer price index, Ministry of Internal Affairs and Communications data showed Tuesday.

Real wages stayed in negative territory for the 13th straight month in April, impeding consumer consumption, although pent-up demand has supported spending linked to services. Total CPI excluding imputed rents rose 4.1% y/y in April after a 3.8% increase in March. Total cash earnings, or nominal wages, posted a 1% y/y gain in April, slowing from 1.3% in March.

Base wages, the key to a steady recovery in cash earnings, rose 1.1% y/y after rising 0.5% in March.

MNI reported Monday Bank of Japan staff are set to increase their inflation forecast for the BOJ’s July meeting and could recommend increasing the 0% rate currently targeted under yield curve control, though it is uncertain Governor Kazuo Ueda would follow such advice (see: MNI POLICY: BOJ Officials Mull Recommending July YCC Tweak).