MNI BRIEF: Japan Feb Negative Real Wage Widens to -1.3%

The year-on-year drop of inflation-adjusted real wages, a barometer of households' purchasing power, widened to 1.3% in February from a 1.1% fall in January, preliminary data released by the Ministry of Health, Labour and Welfare on Monday showed.

February’s result represents the 23rd straight month wages have remained in negative territory, which will impede household spending. The degree of negative real wages is expected to narrow as the y/y rise of consumer price index will likely slow.

Scheduled earnings rose 2.2% y/y in February, marking the 10th consecutive rise. Total cash earnings, or nominal wages, posted a 1.8% year-on-year gain in February, for the 26th straight increase.

The BOJ will want to note strong services price inflation before it any further policy action. (See MNI POLICY: April Services Data Key For Further BOJ Rate Move)