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.
Japan’s labor market is the tightest it has been in decades, but that hasn’t translated into sustained wage pressures. Base wages for full-time workers haven’t risen more than 1 percent in any month over the last two years, and while part-time workers are seeing better per-hour pay they are working fewer hours.
