MNI DATA IMPACT: Japan Dec Wages Down; Real Pay Negative

Average Japanese wages fell 3.2% y/y in December, recording a ninth straight drop following a 1.8% decline in November. Real wages also remained in negative territory, according to preliminary data released Tuesday by the Ministry of Health, Labour and Welfare.

Total monthly average cash earnings per regular employee fell 3.2% y/y to JPY546,607 in December.

In real terms, average wages fell 1.9% y/y in December, a 10th straight drop following a 0.7% decline in November. Total CPI minus impute rents fell 1.4% y/y in December after falling 1.1% in November.

Base wages, the key to a steady recovery in cash earnings, fell 0.1% y/y after falling 0.2% in November, for the second straight drop.

Overtime pay plunged 8.9% y/y in December following a 10.8% fall previously.

The fall was mainly due to a drop in overtime working hours (-7.6% y/y in December vs. -10.2% in November) amid weak economic activities in service businesses caused by the pandemic impact.

Bonuses and other special pay fell 5.4% y/y in December, for the eighth straight drop following November's 12.8% fall.

The government didn't offer a monthly assessment, maintaining the view that wages fell in the wake of the drop in working hours amid the pandemic.

In 2020, average wages fell 1.2% y/y for the second straight year following -0.4% in 2019.