MNI BRIEF: Japan October Real Wages Fall, 19th Straight Drop

The y/y drop of inflation-adjusted real wages, a barometer of households' purchasing power, narrowed to 2.3% in October from a 2.9% fall in September, the 19th straight monthly fall, data released by the Ministry of Health, Labour and Welfare showed on Friday.

Total cash earnings, or nominal wages, posted a 1.5% y/y rise in October, accelerating from September's 0.6%.

Scheduled earnings rose 1.4% y/y in October, also accelerating from September’s 1.0%.

Overtime pay fell 0.1% y/y in October after falling 0.5% in September, while bonuses and other special pay rose 7.5% y/y in October following September’s 8.6%.

While Bank of Japan officials do not expect real wages to turn positive anytime soon, they believe negative real wages will improve as the y/y rise in the consumer price index continues to slow.

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

Total CPI minus imputed rents rose 3.9% y/y in October after rising 3.6% in September.