MNI BRIEF: Japan Dec Negative Real Wage Narrows

The year-on-year drop of inflation-adjusted real wages, a barometer of households' purchasing power, narrowed to 1.9% in December from a 2.5% fall in November, preliminary data released by the Ministry of Health, Labour and Welfare on Tuesday showed

However, December’s data showed that real wages stayed in negative territory for the 21st straight month, impeding household spending which has been hit by high prices.

Bank of Japan officials do not believe negative real wages will turn positive anytime soon, but they expect improvement on the premise that the y/y rise in the consumer price index continues to slow.

Total CPI minus imputed rents rose 3.0% y/y in December after rising 3.3% in November.

Scheduled earnings rose 1.6% y/y in December, accelerating from November’s 1.0% and marking 1% growth for the eighth consecutive month.

Real wages in 2023 fell 2.5% y/y for the second straight year following -1.0% in 2022 and for the lowest level since 1990s.