The purchasing power of wages fell in Japan

reported by Mehr News Agency, wages adjusted based on Japan’s inflation along with household consumption fell in August, but analysts said underlying trends showed a gradual recovery. It refers to payment and consumption and should support the plans of the central bank to further increase the interest rate.

Real wages in the world’s fourth-largest economy fell 0.6 percent in August from a year earlier, according to data released by the Ministry of Health, Labor and Welfare on Tuesday. The decline followed a revised 0.3 percent increase in July.

Real wages rose in June for the first time in more than two years as companies increased summer bonuses, although the Labor Department said the share of such special payments in data from August decreases. This payment increased by 2.7% in August compared to a revised 6.6% in July and 7.8% in June.

At the same time, August wage data showed that base pay rose 3 percent, the most in nearly 32 years, reflecting labor-management wage negotiations this spring that led to The companies had the largest increase in the last three decades.

Masato Koike, chief economist at Sampo Plus said real wages were expected to return to negative territory. From this point of view, the current situation is not so unpleasant.

Separate data showed that household spending fell 1.9 percent in August from a year earlier, potentially casting doubt on the strength of private consumption, which more than It makes up half of Japan’s economy.

However, the fall was less than market estimates for a 2.6 percent decline, according to a Reuters poll, and seasonally adjusted consumption rose 2 percent from the previous month, the fastest pace of growth. It showed in one year.

According to economists, although the household savings rate remains high, if the perception of rising wages improves consumer sentiment , Consumption will probably improve gradually.

Sustained wage growth is a prerequisite for the Bank of Japan to raise interest rates again after the first increase in 17 years in March and a subsequent increase in July. While the central bank said in its quarterly report on Monday that rising prices and wages were spreading across Japan, it also cited concerns among small and medium-sized companies about the pressure on profits from rising interest rates.

Nominal wages, or the average total cash income of each worker per month, increased by 3 percent compared to August last year and reached 296,588 yen equivalent to 1999.11 dollars, while in July had increased by 3.4 percent. Overtime payment, a barometer of a company’s financial strength, has grown by 2.6 percent.

The consumer price index, which officials use to calculate real wages and includes fresh food prices, rose 3.5 percent in August, the biggest increase since October last year. Japan’s consumption-driven economy grew at an annual rate of 2.9 percent, and core inflation remained above the central bank’s 2 percent target, keeping alive expectations for further rate hikes.