Japan’s overtime pay growth slowed in July 2026, suggesting a possible moderation in wage-driven inflation pressures and labor market tightness. According to the latest data updated on 7 September 2026, overtime pay rose 3.10% year-over-year in July, down from a 3.40% year-over-year increase recorded in June 2026.
Both readings compare each month’s overtime pay to the same month a year earlier, indicating that while overtime compensation is still growing, the pace has eased. The deceleration from June to July may point to slightly weaker demand for extra hours or an initial cooling in the previously robust wage dynamics that have been closely watched by policymakers and investors monitoring Japan’s economic recovery and inflation outlook.