Unprecedented growth of workers' wages in Japan

According to the Mehr News Agency, the Japanese Ministry of Labor announced Wednesday that workers' nominal cash revenue rose by 4.9 percent in December compared to the previous year, up from 4.9 percent in November. This reading went beyond the anticipation of the consensus of economists and made the biggest leap since year 2. This strong increase was due to the mutation of the rewards.

Following the release of the news, Yen was strengthened by the dollar by up to 1.5 percent and reached 3.6 %, leading to a rise in prices among Group 2 currencies. The Japanese government's debt return also increased. Nao Hasgava, Strategist A senior bond at Okasan Securities said that the sales of debt bonds increased sharply due to wage growth data, as the market speculates that the Central Bank of Japan will continue to increase interest rates.

In another positive change to pay, real wages for the second consecutive month increased in December. Economists expected real wages to decline in the midst of increased inflation. Overall inflation in the country has been over 3 % for nearly three years and reached 4.9 percent in December.

The wage trend is still undergoing market oversight even after the latest decision by the Central Bank of Japan to increase borrowing costs, as it can affect the future interest rate rise. Last month, the central bank made its third increase in less than a year after evaluating the rise in wages and the market's initial reaction to Donald Trump's return to the White House.

Masato QuakeSenior economist at the institution Sampo Plus said the wage growth trend, of course, would remain a key indicator for the Central Bank of Japan's policy decisions. According to him, the wage growth trend has been on the right track so far, but it is unlikely that the base payment will increase until the spring talks.

At the press conference after deciding on interest rates in January, Casuo Ouda The central bank manager announced the likelihood of further rates and noted that the country's interest rates remain below the neutral level. Ouda He emphasized the need for monitoring economic conditions before the next move, and noted the importance of paying attention to payments.

Looking at the future, the market is closely witnessing the wage negotiations that are due to reach its peak in March to evaluate the stability of wage growth. The largest leader of the Japanese trade union has repeatedly met with business representatives to pressure higher wages, emphasizing their goal of raising wages by 5 % and a slightly higher target for smaller companies.

In order for real wages to see a sustainable rise, one of the main concerns of inflation and the continued weakness of the yen is raising the price of imports. Japanese prices have been rising or higher for nearly three years, which has increased or higher, which has affected consumer emotions.

Yen is more than 2 percent less than the dollar last year and will probably remain under pressure for a while, as US Federal officials are increasingly reporting a possible delay in interest rates in the midst of Trump's uncertainty. In addition, a wave of tariffs has increased inflationary risks in the United States that can further weaken the yen.

Kennedy the growth of official wages is currently cautious about the costs, not only for the Central Bank of Japan but also for the Prime Minister government. Shigero Ishiba It is also worrying. Government Ishiba It intends to drive $ 1.2 trillion Yeni Equal to 1. Billion dollars, including the allocation of water and electricity subsidies and cash donations for low -income households.

Japan's latest consumption process is to be shown in future data, including household spending data, which is due to be released on Friday. GDP will also be released later this year, and economists expect to decline in private consumption growth.

According to experts, the increasing trend of nominal wages has not affected consumption mainly due to the slow growth of real wages. If real wages grow sustained in the middle of the year with the decline in inflation in the middle of the year, it is likely that private costs will improve from that point.