By Kaori Kaneko and Satoshi Sugiyama
TOKYO (Reuters) -Japan’s inflation-adjusted real wages rose in June for the first time in more than two years as nominal pay gained at the fastest pace in nearly three decades, data showed, backing the central bank’s view that wage increases are broadening.
However, household spending fell more than expected in the same month, clouding the outlook for the Bank of Japan’s plan to steadily raise interest rates.
The latest market rout, which came in the wake of the BOJ’s decision last week to raise interest rates, may also dampen consumer sentiment, some analysts say.
Real wages grew 1.1% in June, rising for the first time in 27 months, after a revised 1.3% drop in May, data from the labour ministry showed on Tuesday.
Nominal wages, the average total cash earnings per worker, grew 4.5%, the fastest pace of growth since January 1997, to 498,884 yen ($3,480), the data showed.
Regular pay for permanent workers rose 2.7% in June after a revised 2.6% gain in May, a sign the bumper pay hikes offered by firms in this year’s wage negotiations are pushing up household income.
But separate data released on Tuesday showed household spending fell 1.4% in June from a year earlier, more than a median market forecast for a 0.9% drop, suggesting that rising living costs are discouraging consumers from boosting spending.
($1 = 143.3800 yen)