Japan's companies cut bonus payments in July, leading to a surprise drop in total pay for workers. While this was the first fall in 14 months, previous gains have been weak and well below the level needed to generate stronger inflation.

Total cash earnings per worker, including base and overtime pay, dipped 0.3 percent from a year earlier to an average ¥371,808 ($3,390), the first fall in 14 months, the Ministry of Health, Labor and Welfare said in a preliminary report. Adjusted for inflation, total cash earnings slipped 0.8 percent.

Bonuses and allowances slid 2.2 percent to ¥110,156 for the first downturn in six months, thus squeezing the wages for the latest month, the ministry said.