Skip to main content

Advertisement

Advertisement

Japan pay gains inch ahead of living costs for first time in two years

TOKYO — Japanese workers saw their wages increase faster than the cost of living in April for the first time in two years, as the impact of last year’s sales-tax hike faded.

Office workers are reflected in a glass railing as they cross a street during lunch hour in Tokyo June 1, 2015. Photo: Reuters

Office workers are reflected in a glass railing as they cross a street during lunch hour in Tokyo June 1, 2015. Photo: Reuters

Follow TODAY on WhatsApp

TOKYO — Japanese workers saw their wages increase faster than the cost of living in April for the first time in two years, as the impact of last year’s sales-tax hike faded.

Real pay rose 0.1 per cent from a year earlier, the labour ministry said today (June 2). Overall wages, including overtime and bonuses, climbed 0.9 per cent, the most since December, as base pay rose for a second straight month.

Prime Minister Shinzo Abe is prodding businesses to plow more of their near-record cash into salaries and investment as he tries to spur an economy that’s still weighed by the levy increase. The challenge is get wages rising fast enough as the Bank of Japan seeks to generate 2 per cent gains in consumer prices.

Large companies agreed to an average 2.6 per cent increase in pay in talks with labour unions, a boost that Bank of Japan (BOJ) Governor Haruhiko Kuroda said he expects to see show up from this month. The BOJ is counting on higher wages to lift household spending power and drive inflation.

The sales-tax increase in April last year pushed Japan’s economy into recession, prompting Mr Abe to delay another increase slated for this October to April 2017. The government is trying to rein in its budget as it tries to curb the world’s heaviest debt burden. BLOOMBERG

Read more of the latest in

Advertisement

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.