Employees in Japan saw earnings soar in December 2022

Boosted by winter bonuses, wages in Japan rose to their highest level in nearly 26 years, Japan’s Labour Ministry has reported.
By: | February 8, 2023

Employees in Japan saw a significant boost in their nominal wages in December 2022, with a 4.8% year-on-year increase, marking the fastest pace of growth since 1997, according to the latest data from Japan’s Labour Ministry. The rise in wages, which was attributed to the increase in winter bonuses, surpassed the 2.5% growth estimate by economists.

Scheduled pay also recorded a 1.9% increase, reflecting a closer match to the trend of wages excluding additional payments, but it still falls short of the 3% deemed necessary by the central bank and economists to maintain a stable 2% inflation rate. Additionally, a marginal 0.1% increase in real wages was also recorded in Japan for the first time since March, despite inflation still limiting households’ purchasing power.

READ: Firms in Japan expected to offer largest wage increment in 26 years

Considering the close connection between wage developments and changes in policy at the Bank of Japan, the hike in wages may spur market speculation that the central bank will adjust or reverse its stimulus programme under a new governor, reported The Straits Times.