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

Average Japanese wages fell 0.8% y/y in October, recording a seventh straight monthly drop following a 0.9% decline in September. 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 0.8% y/y to JPY270,095 in October.

In real terms, average wages fell 0.2% y/y in October, an eighth straight decline following a 1.1% fall in September. Total CPI minus impute rents fell 0.5% y/y in October after being unchanged in September.

Base wages, the key to a steady recovery in cash earnings, rose 0.3% y/y after rising 0.1% in September for the second straight rise.

Overtime pay plunged 11.7% y/y in October following the previous 12.3% fall.

The fall was mainly due to a drop in overtime working hours (-11.1% y/y in October vs. -13.4% in September) amid weak economic activity in service businesses caused by the pandemic disruptions.

Bonuses and other special pay fell 7.2% y/y in October for the sixth straight drop following September's 8.5% fall.

The government didn't offer a monthly assessment, maintaining the view that wages fell due to the drop of working hours amid the coronavirus.