Japan’s real wages rose for a fourth consecutive month in April, supported by stronger earnings growth and easing inflation, offering further signs that household purchasing power is improving ahead of the Bank of Japan’s next policy meeting.
Government data showed real wages increased 1.9% year-on-year in April, extending gains from previous months as workers benefited from higher bonuses and steady salary growth.
Average nominal wages, or total cash earnings, climbed 3.5% from a year earlier to 312,425 yen (US$1,954), marking the fastest increase since December 2024. It was also the first time in more than 34 years that wage growth exceeded 3% for three consecutive months.
Special payments, which largely consist of one-off bonuses, surged 7.4% in April after a revised 0.7% decline in March. Regular pay, which reflects base salaries, rose 3.4%, unchanged from the previous month, while overtime pay increased 4.2%, accelerating from a revised 3.1% rise in March.
A labour ministry official said, “In addition to the boost from special payments, steady growth in nominal wages and easing inflation have helped lift real wages.”
The inflation rate used by the labour ministry to calculate real wages eased to 1.5% in April from 1.6% in March, remaining below the Bank of Japan’s 2% target for a fourth straight month. Consumer inflation has moderated partly due to government subsidies that have helped offset higher import costs from the weak yen and elevated oil prices linked to the Iran conflict.
The latest wage figures come as the Bank of Japan prepares for its policy meeting on June 15-16. The central bank has repeatedly stressed that sustainable wage and price growth are key conditions for further interest rate increases.
Separately, household spending continued to contract but at a slower pace than expected. Consumer spending fell 0.5% year-on-year in April, outperforming market expectations for a 1.5% decline and marking the smallest drop in five months.
On a seasonally adjusted basis, household spending rose 1.6% month-on-month, exceeding forecasts for a 0.8% increase and suggesting consumer demand may be stabilising despite ongoing economic uncertainties.
