Growth in Japanese workers’ wages unexpectedly slowed in June, indicating that the labor market may be losing some steam and clouding prospects for the Bank of Japan’s sustainable inflation goal.
Nominal cash earnings for workers rose 2.3% from the previous year, decelerating from a revised 2.9% clip in the previous month, the labor ministry said Tuesday. The result missed the consensus estimate of 3% growth. The decline in real cash earnings deepened as they fell 1.6% from a year earlier. Economists were expecting a 0.9% decline, the same as in May.
The weak wage results represent a setback for the BOJ, where Gov. Kazuo Ueda is watching income trends closely as a key factor that will determine the long-range likelihood of achieving sustainable inflation.