MNI BRIEF: Japan Real Wage Narrows To -0.6%, Beats Expectations

The y/y drop of inflation-adjusted real wages, a barometer of households' purchasing power, narrowed to 0.6% in January from a 2.1% fall in December, beating the market's -1.5% forecast, preliminary data released by the Ministry of Health, Labour and Welfare on Thursday showed.

January represented the 22nd straight month real wages stayed in negative territory, however, impeding spending by households hit by high prices.

The persistent negative real wages showed household income has not caught up with price rises, but the degree of negative real wages will likely narrow as the y/y consumer price index rise narrows further.

Total CPI minus imputed rents rose 2.5% y/y in January, slowing from 3.0% in December and 3.3% in November. Scheduled earnings rose 1.4% y/y in January after rising 1.4% in December, marking 1% growth for the ninth consecutive month. Total cash earnings, or nominal wages, posted a 2.0% y/y gain, accelerating from December's 0.8%.

MNI reported this week the BOJ could adjust policy in March. (See MNI POLICY: Weaker Econ Data Risk May Push March BOJ Action)