Published by Global Banking & Finance Review®
Posted on April 7, 2025
2 min readLast updated: January 24, 2026
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Japan's real wages decreased for the second month in February due to rising inflation, while US tariffs raise economic concerns. The government plans measures to support industries.
TOKYO (Reuters) - Japanese real wages dropped for a second straight month in February due to higher inflation, labour ministry data showed on Monday, amid broader worries in Japan about the impact of U.S. tariffs.
U.S. President Donald Trump's sweeping tariffs announced last week have sparked fears of a slowdown in the global economy that could dampen Japan's fragile recovery.
Prime Minister Shigeru Ishiba on Thursday promised measures to help domestic industry deal with the fallout of Trump's tariffs.
Inflation-adjusted real wages, a barometer of consumer purchasing power, declined 1.2% in February from a year earlier after a revised 2.8% drop in January, labour ministry data showed.
The consumer inflation rate the ministry uses to calculate real wages, which includes fresh food items but not rent costs, grew 4.3% year-on-year, easing only slightly from a 4.7% gain in January.
Japan's ruling coalition and the opposition Democratic Party for the People (DPP) agreed on Friday to curb gasoline prices to help ease the burden on consumers from wider economic pain stemming from U.S. tariffs.
Regular pay, or base salary, rose 1.6% in February, slowing from a 2.1% rise in January, the data showed.
Overtime pay, a barometer of corporate activity strength, rose 2.2% in February, after a revised 1.5% increase in January.
Total average cash earnings, or nominal pay, increased 3.1% to 289,562 yen ($1,981) for the month, after a revised 1.8% rise in January, helped by the gains in special payments. Special payments - mainly made up of volatile one-off bonuses - jumped 77.4%, data showed.
Japanese companies have agreed to raise pay by an average of 5.4% this year, the biggest pay hike in more than 30 years, the country's largest union umbrella group Rengo said.
The effect of Japan's annual spring wage talks usually starts to show up in wage data for April or later.
($1 = 146.1900 yen)
(Reporting by Kaori Kaneko; Editing by Hugh Lawson)
The article discusses the decline in Japan's real wages due to rising inflation and the impact of US tariffs on the economy.
US tariffs are causing fears of an economic slowdown, impacting Japan's fragile recovery and prompting government action.
Japan's government is planning measures to support domestic industries and curb gasoline prices to ease consumer burdens.
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