Japanese wage growth accelerated in January to its fastest clip since last June, bolstering the case for the Bank of Japan to end its negative interest rate in the near term.
Nominal cash earnings for workers rose 2% in January year on year, accelerating from a revised 0.8% increase in December, the labor ministry said Thursday. The result outpaced economists’ consensus estimate of 1.2% growth. Real wages fell 0.6%, a smaller drop than forecast and the slowest decline in a year.
The data comes as annual wage negotiations between companies and unions are reaching their climax, with the first big batch of results expected next week. The BOJ is monitoring wage trends closely for signs of a virtuous cycle linking higher pay with demand-led price gains.