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Japan’s Real Wages Rise for First Time in 13 Months, Lifting Case for BOJ Tightening

Cooling inflation to 1.7% alongside a 3.0% base‑pay gain signaled firmer household purchasing power.

Overview

  • Official data show real wages rose 1.4% year over year in January, breaking a 12‑month run of declines.
  • Total cash earnings increased 3.0% to 301,314 yen, accelerating from December’s 2.4% pace.
  • Regular pay climbed 3.0%, the fastest since 1992, while overtime rose 3.3% and special payments gained 3.8%.
  • The inflation gauge used for real‑wage calculations slowed to 1.7%, the weakest since March 2022.
  • The reading lands before the Bank of Japan’s March 18–19 policy review after a December hike to 0.75%, with Rengo unions seeking average wage increases of 5.94%.