Overview

• The Central Minimum Wage Council approved a 6 percent increase in the national average minimum wage to 1,118 yen per hour, effective in October and marking the largest rise since 2002.
• The new rate will surpass South Korea’s minimum wage for the first time in two years.
• Government data showed real wages fell for the sixth straight month in June as inflation continued to outpace pay growth.
• Prime Minister Shigeru Ishiba pledged targeted aid for municipalities that set wages above the official guideline and reaffirmed a decade-end goal of 1,500 yen per hour.
• Small businesses that employ about 70 percent of Japan’s workforce may struggle to absorb higher labor costs as prefectural councils adjust local rates in line with the central recommendation.