Japan Wages Fall Most Since 2015 as Winter Bonuses Slide

(Bloomberg) -- Japanese wages fell in December for a ninth straight month, declining the most since June 2015, as employers remained fearful of the profit outlook amid a global resurgence of the coronavirus.

Labor cash earnings slid 3.2% from a year earlier, as year-end bonus payments plunged, labor ministry data showed Tuesday. Economists predicted an overall 4.8% decline.

Key Insights

What Bloomberg Economics Says...

“We expect wages to weaken further in 1Q. The early stage of spring wage negotiations doesn’t send a strong signal for pay rises. But the wage gap between manufacturers and non-manufacturers appears to have increased during the pandemic.”

--Yuki Masujima, economist

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• Bonus payments fell 5.4% from the prior year.
• Adjusted for inflation, overall wages dropped 1.9%. Analysts had forecast a 3.4% decline.

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