Japan Sees Highest Base Salary Increase in 32 Years

Foreks - In Japan, the base salary rose at its fastest pace in 32 years in October, boosting real wages after a two-month decline and statistically supporting the likelihood of an interest rate hike by the central bank this month. According to data from the Ministry of Labor, following an average increase of 5.1% agreed upon during spring wage negotiations among major firms, more companies set higher salaries, resulting in a 2.7% increase in base salary or regular payments in October, the fastest rise since November 1992. Overtime pay, a barometer of business strength, rebounded with a 1.4% increase after a revised 0.9% decline the previous month. Nominal wages, or the average total cash earnings of a worker, rose by 2.6% in October to 293,401 yen ($1,955). The inflation rate used by the ministry for wage calculations, excluding equivalent rents for homeowners, also stood at 2.6%. Real wages adjusted for inflation, a significant indicator of consumer purchasing power, remained unchanged compared to the previous year in October, despite revised declines of 0.4% in September and 0.8% in August.