Employees in Japan saw earnings soar in December 2022
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.
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.