TOKYO, Sept 8 (Reuters) - Japan's real wages rose 2.4% in July from a year earlier, marking the biggest increase since May 2021 and the seventh consecutive month of gains, government data showed on Tuesday, signalling that pay trends were gradually recovering.
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The solid wage data supports the case for the Bank of Japan to raise interest rates at next week's policy meeting, three months after its previous rate hike, and to continue tightening thereafter.
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The growth in real pay was better than June's revised 2.2% gain.
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A labour ministry official said in addition to the boost from special payments, steady growth in nominal wages and relatively mild inflation have helped lift real wages.
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Average nominal wages, or total cash earnings, rose 4.7% to 436,401 yen ($2,799.96) a month, the biggest jump since January 1997 and faster than a revised 4% gain in June.
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Workers' base salaries, or regular pay, increased 4.1%, the fastest rise since April 1992 and accelerating from a revised 3.5% rise in June. Overtime pay growth in July stood at 3.1%, slowing from June's revised 3.4%.
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Special payments, consisting mostly of one-time bonuses that tend to be volatile, jumped 6.3% in July after revised 4.7% growth for June.
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The inflation rate used by the ministry to calculate the headline real wage indicator rose to 2.2% in July from 1.9% in June, reaching 2% for the first time this year. It remained below year-earlier levels, when it stood at 3.6%.
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BOJ Governor Kazuo Ueda said last week the central bank would debate raising interest rates at upcoming meetings, including in September, with a focus on whether inflationary risks were heightening, signalling a strong chance of a hike this month.
($1 = 155.8600 yen)
Reporting by Satoshi Sugiyama; Editing by Jamie Freed
Source: Reuters