FX.co ★ Japan’s Overtime Pay Growth Cools in September, Easing to 3.6% YoY

Japan’s overtime pay growth decelerated in September 2026, signaling a potential moderation in labor-market tightness and wage-driven cost pressures. According to the latest data updated on 5 November 2026, overtime pay rose 3.60% year-over-year in September, down from a 4.90% year-over-year increase recorded in August 2026.

Both figures reflect changes compared with the same month a year earlier, highlighting a clear loss of momentum in overtime wage growth as the third quarter drew to a close. While overtime pay remains higher than a year ago, the slowdown from August to September may suggest softer demand for extra hours, a shift in working patterns, or early signs of normalization after a period of stronger wage gains.

Investors and policymakers will be watching upcoming wage data closely to assess whether September’s weaker overtime pay growth marks the start of a broader cooling trend in Japan’s labor market, or merely a temporary pause following robust gains earlier in the year.