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

Average Japanese wages fell 1.3% y/y in July, recording a fourth straight drop following a 2.0% decline in June. Real wages also remained in negative territory, preliminary data released Tuesday by the Ministry of Health, Labour and Welfare showed.

Total monthly average cash earnings per regular employee fell 1.3% y/y to JPY369,551 in July.

In real terms, average wages fell 1.6% y/y in July, a fifth straight drop following a 2.1% decline in June. Total CPI minus impute rents rose 0.3% y/y, after rising 0.1% in June.

Base wages, the key to a steady recovery in cash earnings, rose 0.3% y/y after rising 0.4% in June.

Overtime pay plunged 16.6% y/y in July following a 24.5% fall previously. The fall was mainly due to a drop in overtime working hours (-15.3% y/y in July vs. -23.9% in June) amid a slowing economy triggered by the pandemic impact. Bonuses and other special pay fell 2.4% y/y in July, for the third straight drop following June's 2.5% fall.

The government didn't offer a monthly assessment, only saying that working hours fell in the wake of the spreading coronavirus.