MNI BRIEF: Japan June Real Wage Hits 15th Straight Y/Y Drop

The year-on-year drop of inflation-adjusted real wages, a barometer of households' purchasing power, widened to 1.6% in June from a 0.9% fall in May as the consumer price index rise accelerated, data released by the Ministry of Internal Affairs and Communications on Tuesday showed.

Real wages stayed in negative territory for the 15th straight month in June, illustrating how household income has not kept pace with price rises and has impeded low-income household and elder spending.

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

Total CPI minus imputed rents rose 3.9% y/y in June after rising 3.8% in May. Total cash earnings, or nominal wages, posted a 2.3% y/y gain in June following 2.9% in May.

Scheduled earnings rose 1.5% y/y in June following 1.6% in May, while overtime pay rose 2.3% y/y, accelerating from 0.5% the previous month. Bonuses and other special pay rose 3.5% y/y, following May’s 35.9% gain.