MNI BRIEF: Japan Dec Negative Real Wage Narrows To -0.1%

Inflation-adjusted real wages, a key barometer of households’ purchasing power, remained in negative territory in December for the 12th consecutive month, falling 0.1% after a 1.6% decline in November, preliminary data released Monday by the Ministry of Health, Labour and Welfare showed.

The data indicate wages have yet to catch up with inflation, leaving households under pressure from elevated living costs. However, real wages are likely to return to positive territory in coming months as the year-on-year rise in headline CPI slows, partly reflecting government measures.

The year-on-year increase in total CPI excluding imputed rent rose 2.4% in December, easing from 3.3% in November.

Total cash earnings — or nominal wages — rose 2.4% in December following a 1.7% increase in November, marking the 48th consecutive monthly rise. Scheduled earnings increased 2.2% after rising 1.9% previously.

Constant-sample data, which remove sampling volatility and are closely watched by BOJ officials, rose 2.1% in December after a 2.0% gain in November.

The real wage fell 1.3% y/y in 2025 for the fourth straight drop following -0.3% as consumer price rose sharply during the year.