Data released by Japan’s labor ministry on Tuesday showed labor cash income rose 2.3% on an annualized basis in June, a slowdown from a revised 2.9% increase the previous month, and the data fell short of the consensus forecast of 3%.
The decline in real cash receipts deepened, falling 1.6% year-on-year, compared with the 0.9% decline economists had expected.
The weak wage data was a blow to the Bank of Japan.
A deeper decline in real income could put pressure on consumption, forcing retailers to lower prices through promotions and other activities to attract consumers.
For that reason, Tuesday’s data may support the BOJ’s recent assessment that Japan is still some way away from sustaining price gains above 2 percent and thus needing to maintain ultra-loose policy for now.
