MNI: Japan June Wage Growth Jumps on Bonuses, Trend Modest

--Japan June Average Wages +3.6% Y/Y, 11th Straight Rise

--Japan June Real Average Wages +2.8% Y/Y; May +1.3%

--Japan June Base Wages +1.3% Y/Y, 15th Straight Rise

--Japan June Overtime Pay +3.5% Y/Y, 8th Straight Rise

--Japan June Bonuses, Other Special Pay +7.0% Y/Y, May +18.6%

--Japan Offl: Special Pay Could Fall in July, Lead To Total Wage Drop

     TOKYO (MNI) - The average wage growth in Japan jumped in June on early

summer bonus payments at some firms and a decline in the share of lowly paid

part-time workers, but the recent trend remains modest, preliminary data

released Tuesday by the Ministry of Health, Labour and Welfare showed.

     The key points from the Monthly Labour Survey:

     * Total monthly average cash earnings per regular employee in Japan surged

3.6% on year to Y448,919, posting the 11th straight year-on-year rise, compared

to the recent median growth rate of +0.9%. It followed +2.1% in May and +0.6% in

April.

     * "This is largely due to the increase in bonuses and other special pay,

which could show a year-on-year drop in July as seen in July last year (-3.1%)

and lead to a decline in total wages in July," a ministry official said. "Annual

wage hikes may be supporting the growth in base wages but the occasional page of

total wage growth is still dependent on special pay."

     * The ministry left its long-held assessment unchanged, saying wages have

been increasing "moderately." Companies are generally cautious about raising

base wages amid uncertainty over global and domestic economic growth. Some

sectors are raising wages to help alleviate serious labor shortages.

     * In real terms, average wages rose 2.8% on year in June after rising 1.3%

in May, posting the fourth year-on-year rise in the past 12 months. The recent

weak trend was caused by the rising cost of living. The total CPI minus imputed

rents rose 0.8% on year in June, with the pace of increase decelerating from a

peak of +1.8% in February as fresh food prices eased after a surge late last

year.

     * Base wages, the key to a steady recovery in cash earnings, rose 1.3 % in

June from a year earlier, the 15th straight year-on-year rise after rising 1.3%

in May, which was the fastest pace of increase since June 1997.

     * Hourly base wages of regular employees working part time gained 1.8% on

year after +2.1% in the previous month while base wages for full-time workers

rose at a slower pace of 0.9% after rising 1.3%.

     * Overtime pay rose 3.5% on year in June, the eighth straight y/y rise

after rising 2.0% in May. Overtime working hours were unchanged on year after

+0.9% in May. Regular working hours fell 0.9% on year, the first y/y drop in two

months after +0.9% in the previous month.

     * Bonuses and other special pay gained 7.0% from a year before, marking the

10th year-on-year rise in the past 12 months after +18.2% in May. This category

tends to fluctuate widely.

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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