Corporate cost-cutting is dragging on wages, resulting in weaker consumer demand and a stronger case for monetary easing to counter deflation.
Overall pay fell to ¥243.5 trillion in the second quarter, according to a government report Monday. The figure, which is seasonally adjusted, was only 0.7 percent above the level in the final quarter of 2009, which was the lowest since 1991.
Companies targeting cost reductions span Tokyo Electric Power Co., the operator of the devastated Fukushima No. 1 nuclear plant, and heavy exporters Panasonic Corp. and Sharp Corp.