MNI BRIEF: Japan Feb Wages Moderate; Real Pay Negative

Inflation-adjusted real wages, a barometer of household purchasing power, fell by 2.6% y/y in February – the 11th straight negative print following January's 4.1% decline, according to Ministry of Internal Affairs and Communications data released Friday.

Japanese authorities are now focused on whether real wages turn positive in or after April when major firms plan to raise wages. The negative print follows recent high CPI levels.

Total CPI minus imputed rents rose 3.9% y/y in February, slowing from a 5.1% rise in January. Total cash earnings, or nominal wages, posted a 1.1% y/y gain in February – the 14th straight rise – accelerating from 0.8% in January. Base wages, the key to a steady recovery in cash earnings, also rose 1.1% y/y after rising 0.9% in January. Overtime pay, meanwhile, increased 1.7% y/y, up from January's 0.5%. Bonuses and other special pay fell 1.7% y/y, following January’s 1.3% decline.