Even nominal wages fell in June in Japan, the first time this year that this has happened. Falling nominal wages had been a commonplace with Japan's deflation, but now that we have some form of inflation back, then this is rather more surprising. Monthly wages, including overtime and bonuses, decreased 0.6 percent in June from a year earlier to 463,013 yen ($4,294), according to the latest data from the Labor Ministry. Bonuses fell 1.5 percent, the biggest drop since December. This connection with December is not entirely incidental since these are the months when large extra bonuses are paid. The fact that these are now significantly down even in nominal terms will evidently put noticeable pressure on household spending.
Prices of Japan's most frequently purchased goods rose 4.2 percent in June, prompting households to reduce spending for a fourth month. Sales at department stores were down 7.6 percent, the fastest pace in a decade, due to the rising prices of daily necessities, according to the Japan Department Store Association.
Real wages (ie corrected for inflation) were down annually by 2.9%, the third consecutive month of decline.
