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Japan Real Wages Drop 2.8% in November as Bonus Slump Deepens Pay Squeeze

Weak pay gains leave the Bank of Japan facing a tricky path on further tightening.

Overview

  • Inflation-adjusted pay fell 2.8% from a year earlier, the steepest drop since January and the 11th straight monthly decline.
  • Total cash earnings rose just 0.5% to ¥310,202, the slowest nominal wage growth since December 2021.
  • Special one-off payments slid about 17%, and a labour ministry official said preliminary November bonus figures often understate winter payouts.
  • Consumer prices rose 3.3% in November, continuing to outpace wage growth and erode purchasing power.
  • The Bank of Japan raised its policy rate to 0.75% last month, while the largest union group, Rengo, is seeking pay increases of at least 5% in upcoming talks.