MNI BRIEF: Japan's Oct Negative Real Wages Narrow

Inflation-adjusted real wages, a barometer of households’ purchasing power, remained in negative territory for the 10th straight month in October, falling 0.7% after a 1.3% drop in September, preliminary data from the Ministry of Health, Labour and Welfare showed Monday.

The figures indicate wages are still failing to keep pace with inflation, leaving households under pressure from high living costs. However, the pace of decline narrowed, suggesting real wages are gradually moving toward positive territory as year-on-year CPI gains are expected to slow due to government measures.

The year-on-year rise in total CPI excluding imputed rents was unchanged from September at 3.4% in October.

Total cash earnings, or nominal wages, rose 2.6% in October, accelerating from 2.1% in September, while scheduled earnings also increased 2.6%—the highest level since December 2024, when they also rose 2.6% following a 2.0% gain in September.

Overtime pay rose 1.5% y/y in October after a 1.0% increase in September, and bonuses and other special payments climbed 6.7% following a 3.8% rise the previous month.

Constant-sample data—closely monitored by the Bank of Japan as it removes sampling volatility—rose 2.3% in October after a 2.2% increase in September.