TOKYO, May 8 (Reuters) – Japan’s real wages rose 1% in March from a year earlier, government data showed on Friday, in a third straight month of gains that bolster the case for the Bank of Japan to raise interest rates at its next policy meeting in June.
• The data highlight solid growth in Japanese wages, as March’s spring wage negotiations resulted in hikes of above 5% for a third consecutive year.
• The BOJ, which next reviews interest rates June 15-16, considers steady rises in wages and prices as a prerequisite for another hike. Nearly two-thirds of economists polled by Reuters expect the BOJ to raise its benchmark rate to 1.0% by end-June.
• The inflation-adjusted pace of wages, a key measure of household purchasing power, eased from a revised 2% gain in February but exceeded January’s 0.7% uptick, which marked the first real pay rise in 13 months.
• Average nominal wages, or total cash earnings, rose 2.7% to 317,254 yen ($2,029.52), after a revised 3.4% jump for February.
• Nominal pay growth outpaced the consumer inflation rate the ministry uses to calculate real wages, which was 1.6% in March, staying below the BOJ’s 2% target for a third consecutive month. Consumer inflation in Japan has been easing as government subsidies offset rising import costs from a weak yen, as well as surging oil prices due to the Iran war.
• Workers’ base salaries, or regular pay, grew 3.2% in March, slowing from a revised 3.4% rise in the month prior. Base salary growth for full-time workers grew more than 3% for a third straight month.
• Overtime pay also rose 1.9%. Special payments, consisting mostly of one-time bonus payments, fell 1.5% after a revised 7.5% jump for February.($1 = 156.3200 yen)
(Reporting by Satoshi SugiyamaEditing by Shri Navaratnam)