Japan Wage Growth

Japan’s nominal wages rose 2.6% year-on-year in October 2025, the strongest increase in three months and above market expectations of 2.2%. However, wage growth continued to lag behind price increases for the tenth straight month as inflation kept outpacing pay gains. Real wages, a key gauge of household purchasing power, fell 0.7% in October from a year earlier as living costs climbed 3.4%, eroding workers’ disposable income. Base salaries and overtime posted modest increases, while special bonuses jumped 6.7%, though such payments tend to be seasonal and less reliable as a sustained income boost. The data adds pressure on the Bank of Japan ahead of its December policy meeting, with speculation building that policymakers may opt for another rate hike.