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Real Wages in Japan Continue to Decline

TOKYO - Rising prices continue to erode household income despite nominal wage increases. According to the Ministry of Health, Labour and Welfare’s Monthly Labour Survey for May, inflation-adjusted real wages per worker fell by 2.9% compared to the same month last year, marking the fifth consecutive month of decline. This represents the steepest year-on-year drop since September 2023.

While nominal wages, reflected in total cash earnings, did increase, the pace of wage growth has been insufficient to offset the ongoing rise in consumer prices, leaving workers effectively worse off.

Source: テレ東BIZ

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Typhoon No. 25 was making its closest approach to the Kanto region on September 21, bringing central Tokyo into the storm-force wind zone while torrential rain caused widespread flooding, landslides and road damage across Tokyo, Kanagawa, Chiba and Saitama.

Transport disruption caused by Typhoon No. 25 is continuing into September 22 even as the storm moves away from Kanto, with major rail corridors in Chiba Prefecture still suspended, highways and local roads remaining closed and airlines working to recover from hundreds of cancellations during the previous day.

Japan collected another 12 medals on Day 3 of the Aichi-Nagoya Asian Games on September 21, with 17-year-old swimmer Shin Ohashi and karateka Kakeru Nishiyama winning gold, while the host nation also advanced strongly in women's volleyball, baseball, soccer, handball and hockey.

People aged 65 and older accounted for a record 29.6% of Japan's population in 2026, the highest proportion among major countries worldwide, while the number of elderly people in employment also reached an all-time high as Japan marked Respect for the Aged Day on September 21.

Emperor Naruhito and Empress Masako watched Japan defeat Kazakhstan in a women’s basketball preliminary-round game at the 20th Asian Games in Nagoya.

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Tokyo’s stock market was closed on September 21 for Respect for the Aged Day, leaving the Nikkei 225 without a cash close after finishing the previous session at 65,019, while currency and futures markets focused on the yen, the Bank of Japan’s latest rate hike and intervention risks during Japan’s Silver Week holiday.

Japan's first five-day Silver Week holiday in 11 years has put renewed attention on household finances, with persistently high food prices and a weakening yen threatening to erode the benefits of the government's planned consumption tax cut on food.

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The Bank of Japan raised its policy rate from 1.0% to 1.25% on September 18, taking borrowing costs to their highest level in 31 years and accelerating the pace of monetary tightening as persistent inflation and concerns over fiscal expansion put upward pressure on interest rates.

The yen strengthened by more than 1 yen against the dollar in a short period late on September 18 after the Bank of Japan conducted a rate check, a step commonly taken in preparation for possible intervention in the foreign exchange market.

Tokyo stocks rose sharply on September 18, with the Nikkei 225 climbing to around 65,350 in afternoon trading after the Bank of Japan raised interest rates to 1.25%, as the yen weakened and investors bought artificial intelligence and semiconductor-related shares.

The Bank of Japan raised its policy interest rate from 1.0% to 1.25% on September 18, lifting borrowing costs to their highest level in 31 years as policymakers moved to contain growing inflation risks, but the yen weakened sharply after the decision as markets focused on two dissenting votes and uncertainty over the pace of further increases.

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