Japan’s real wage declines for 6th consecutive month in June

Japan's real wages fell in June for the sixth consecutive month as inflation continued to outpace pay growth, government data showed on Wednesday, raising concerns about consumption-led recovery in the world’s fourth-largest economy.

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Inflation-adjusted real wages, a key determinant of households’ purchasing power, fell 1.3% in June from a year earlier, following a revised 2.6% drop in May.

While June's drop in real wages was the slowest since January, it highlights broader pressures on consumption.

Core inflation has exceeded the Bank of Japan's (BOJ) target, potentially giving the central bank leeway to raise interest rates as it unwinds years of loose monetary policy, but factors such as geopolitics and tariffs are looming economic risks.

The consumer inflation rate the ministry uses to calculate real wages, which includes fresh food prices but not rent costs, rose 3.8% year-on-year in June, the lowest in seven months.