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Japan Real Wages Drop 1.4% in September, Marking Ninth Straight Decline

Persistent inflation outpacing pay keeps BOJ timing tied to next year's wage outcomes.

Overview

  • Labour ministry data show real wages fell 1.4% year on year in September after a revised 1.7% decline in August, extending the slide that began in January.
  • Total cash earnings rose 1.9% to ¥297,145, trailing a 3.4% rise in consumer prices that quickened for the first time since April.
  • Regular pay increased 1.9%, overtime pay rose 0.6%, and special payments rebounded 4.5% following August volatility.
  • The BOJ left rates unchanged on Oct. 29–30, and Governor Kazuo Ueda said the 2026 wage outlook will be pivotal for the next hike.
  • Rengo set a target of 5% or more for 2026 pay talks after unions won an average 5.25% increase this year, as Prime Minister Sanae Takaichi urges caution on further tightening.