Japan: Wage pressures mounting – Rabobank

Japanese labor cash earnings fall -0.4% y-o-y vs. a 0.5% gain expected and real cash earnings collapse -0.8% y-o-y vs. an expected 0.1% increase, which suggests mounting wage pressures on Abe administration, according to Michael Every, Senior Asia-Pacific Strategist at Rabobank.

Key Quotes

“Yet again we see that even with a feeble headline rate of inflation, Japanese households experience falling incomes. That’s despite a 2.8% unemployment rate. I’m not sure how you say ‘Phillips Curve’ in Japanese, but I don’t think anybody needs to bother anymore. Certainly, that data point is not good for struggling PM Abe or floundering BoJ Governor “Where-do-I-go-fromhere?” Kuroda.”