Japan's third‑month real wage rise bolsters case for BOJ rate hike

Japan's real wages increased by 1.0% year‑on‑year in March, marking the third consecutive month of inflation‑adjusted pay growth. Total cash earnings rose 2.7% YoY, while base salaries grew 3.2% and overtime pay climbed 1.9%. The spring wage negotiations (shunto) delivered salary hikes above 5% for the third year in a row.

The wage gains meet the Bank of Japan’s stated prerequisite for further monetary tightening. Consumer price inflation stood at 1.6%, below the BOJ’s 2% target, and economists expect the central bank to raise its policy rate to around 1.0% at the June 15‑16 meeting. The sustained wage momentum therefore strengthens the case for an interest‑rate hike in June.