Japan’s Real Wages Drop Extends to Full Year as Prices Advance

Japanese workers’ real wages fell in every month of 2025, underscoring the persistence of inflation and bolstering the case for Prime Minister Sanae Takaichi to continue down a more expansionary fiscal path after she secured a sweeping election victory on Sunday.

Real wages slipped 0.1% from a year earlier in December, the labor ministry reported Monday. Economists had expected the reading to turn positive for the first time in a year after inflation moderated as a result of policy measures intended to reduce living costs. Real wages for 2025 overall declined for the fourth year running.