Key facts
- Japan's real wages increased 1.9% year-on-year in April, the fourth consecutive monthly gain.
- Nominal wages rose 3.5% year-on-year, the fastest growth since December 2024.
- Special payments, including bonuses, surged 7.4% in April.
- Inflation eased to 1.5% in April, remaining below the Bank of Japan's 2% target.
- Household spending declined 0.5% year-on-year, a smaller drop than expected.
Japan's real wages climbed 1.9% in April from a year earlier, marking the fourth consecutive monthly gain. This increase was driven by a 7.4% rise in special payments, such as bonuses, and steady growth in nominal wages, which rose 3.5% year-on-year to 312,425 yen ($1,953.88). This nominal wage growth is the fastest since December 2024 and has exceeded 3% for three consecutive months, a streak not seen in over 34 years. Base salaries grew 3.4%, and overtime pay rose 4.2%. Inflation eased to 1.5% in April from 1.6% in March, staying below the Bank of Japan's 2% target for the fourth month. Household spending declined 0.5% year-on-year, a smaller drop than the 1.5% forecast and an improvement on the 2.9% fall in March. On a month-on-month basis, spending rose 1.6%, double the 0.8% expected. The data is considered by the Bank of Japan as a prerequisite for potentially raising interest rates at its upcoming June 15-16 meeting.