FX.co ★ Japan Nominal Wage Growth Misses Forecast in March

In March 2025, nominal wages in Japan saw a year-on-year increase of 2.1%, which was a deceleration from February's 2.7% rise and fell short of market predictions pegging growth at 2.3%. Concurrently, real wages, which account for inflation and serve as an essential indicator of consumer purchasing power, decreased by 2.1%, marking the third month of decline in succession. Although major Japanese corporations committed to average pay raises surpassing 5% during their annual spring wage talks, these increments generally begin reflecting in official statistics starting April. This weaker-than-anticipated wage data contributes to growing concerns about Japan's economic prospects, which are already hampered by risks from trade tariffs and uncertainties in monetary policy. The focus now shifts to the upcoming GDP report for the first quarter, where economists broadly expect a contraction.