Japan Oct wages show 32-year-high base pay growth, positive for BOJ hike
FILE PHOTO: Pedestrians walk past the Bank of Japan building in Tokyo, Japan March 18, 2024. REUTERS/Kim Kyung-Hoon/File Photo
TOKYO : Japan's base salary grew at a 32-year-high pace in October, government data showed on Friday, boosting real wages after two months of decreases and offering statistical support for the prospects of a central bank rate hike this month.
The Bank of Japan must scrutinise various data at its Dec. 18-19 rate review, dovish board member Toyoaki Nakamura said on Thursday, as the market remains split about the timing of Japan's next interest rate hike between December and January.
Base salary, or regular pay, rose 2.7 per cent in October, marking the fastest increase since November 1992, labour ministry data showed, as more companies set higher salaries after major firms agreed to an average 5.1 per cent raise at the spring wage talks.
Overtime pay, a barometer of business strength, rebounded to 1.4 per cent growth from a revised 0.9 per cent decrease in the previous month.
Combined, nominal wages, or a worker's average total cash earnings, grew 2.6 per cent to 293,401 yen ($1,955) in October.
The inflation rate the ministry uses for wage calculation, which excludes owners' equivalent rent, was also at 2.6 per cent, its slowest in nine months.
That led the inflation-adjusted real wages, a key indicator of consumers' purchasing power, to stay unchanged in October from a year before, against a revised 0.4 per cent drop in September and 0.8 per cent decline in August.
Opposition lawmakers had pressed the government and the BOJ to aim for positive real wage growth after the ruling bloc lost its lower house majority at the October general election.
BOJ Governor Kazuo Ueda last week told the Nikkei newspaper in an interview that the timing of the next interest rate hike was "approaching" as the economy was moving in line with the central bank's forecasts.
Meanwhile, Jiji news agency reported on Wednesday that a cautious view toward an early hike was growing among BOJ policymakers, adding to uncertainty around the chance of a December hike.
($1 = 150.1500 yen)
