MNI BRIEF: Japan Aug Real Wages Fall 2.5% Vs. July -2.7%

The y/y fall of inflation-adjusted real wages, a barometer of household purchasing power, narrowed to 2.5% in August from a 2.7% fall in July, as inflation slowed, data released by the Ministry of Health, Labour and Welfare showed on Friday.

Real wages stayed in negative territory for the 17th straight month in August, illustrating that household income has failed to keep pace with rising prices, particularly impeding low-income household and elder spending.

Pent-up demand continued to support services spending, but spending on goods, such as daily necessities, remained weak.

Total CPI minus imputed rents rose 3.7% y/y in August after rising 3.9% in July. Total cash earnings, or nominal wages, posted a 1.1% y/y gain in August following 1.1% in July.

Scheduled earnings rose 1.6% y/y in August following the prior month's 1.3% gain, while overtime pay rose 1.0% y/y after July's flat read. Bonuses and other special pay fell 5.4% y/y in August following July’s 0.6% increase.