FX.co ★ Japan Nominal Wage Growth Exceeds Forecast

Japan’s nominal wages rose 3% year-on-year in January 2026, up from a 2.4% increase in December and exceeding market expectations of 2.5%. It was the fastest pace of wage growth in six months. Base pay also climbed 3%, marking the largest gain in more than 33 years, while a more stable indicator that adjusts for sampling issues and excludes bonuses and overtime showed wages for full-time workers increasing 2.2%.

At the same time, inflation-adjusted real wages—a key measure of household purchasing power—rose for the first time in 13 months. Real wages grew 1.4% year-on-year in January, following monthly declines throughout 2025, and recorded their strongest increase since May 2021. These figures reinforce the Bank of Japan’s case for continuing the normalization of monetary policy and give the government greater room to advance its core policy priorities.