Japan January real wages rise for first time in 5 months

FILE PHOTO: People cross a street in Tokyo March 18, 2015. . REUTERS/Yuya Shino

TOKYO (Reuters) -Japan's real wages rose for the first time in five months in January, the government said on Tuesday, largely benefiting from a change in the way inflation was calculated in the survey compared to the previous month.

The wage report offers some relief for Prime Minister Fumio Kishida's government after a sharp rise in global energy costs and a recent surge in coronavirus infections posed headwinds to corporate and consumer activity in the country.

"I don't think that we can say wages have returned to pre-coronavirus levels," a labour ministry official said, adding that overtime pay would take longer to recover from declines seen since the onset of the pandemic two years ago.

Inflation-adjusted real wages, a key gauge of households' purchasing power, rose 0.4% in January from a year earlier, the first rise in five months, labour ministry data showed.

The reading was mainly due to a change in the way the base year against which the consumer price index that the labour ministry uses to calculate real wages was estimated, the official said, which led to lower price pressures on real wages.

Nominal total cash earnings rose 0.9% in January, returning to growth after slipping a revised 0.4% in the prior month. Regular pay was up 0.6%, the data showed.

Overtime pay, a barometer of strength in corporate activity, gained 4.4% in January from the same period a year earlier, rising for the tenth straight month.

Special payments, which include the discretionary winter bonuses that firms will slash when they face headwinds, jumped 7.6% in January after a revised 1.1% decline in December, also pushing up nominal wages.

Separate government data on Tuesday showed a service-sector sentiment index edged down 0.2 point in February on extended COVID-19 curbs and rising costs, following a double-digit fall in the previous month.

The Feb 25-28 survey of workers such as taxi drivers and restaurant staff showed their outlook for the economy in the next 2-3 months improved for the first time in five months, as expectations of fewer COVID-19 cases outweighed fears that Russia's invasion of Ukraine would fuel a further surge in raw material and energy prices.

The following table shows preliminary data for monthly incomes and numbers of workers in January:

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Payments (amount) (yr/yr % change)

Total cash earnings 274,172 yen ($2,385.97) +0.9

-Monthly wage 262,331 yen +0.6

-Regular pay 243,870 yen +0.4

-Overtime pay 18,461 yen +4.4

-Special payments 11,841 yen +7.6

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Number of workers (million) (yr/yr % change)

Overall 52.037 +1.0

-General employees 35.623 +0.6

-Part-time employees 16.413 +2.0

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The ministry defines "workers" as 1) those who were employed for more than one month at a company that employed more than five people, or 2) those who were employed on a daily basis or had less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted, at a company that employs more than five people.

To view the full tables, see the labour ministry's website at: http://www.mhlw.go.jp/english/database/db-l/index.html

($1 = 114.9100 yen)

(Reporting by Daniel Leussink and Kantaro Komiya; Editing by Raju Gopalakrishnan & Simon Cameron-Moore)

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