According to data from the Ministry of Health, Labour and Welfare, the inflation adjustment reflects that the 3.3 percent rise in consumer prices far exceeded the nominal increase of 0.5 percent, which placed the average wage at 310,202 yen (about $1,980).

The sustained increase in food and energy prices has kept purchasing power in negative territory, even though nominal wages have been growing for 47 consecutive months.

However, the pace of growth slowed compared to October, affected by a 17 percent drop in special earnings, considered a volatile factor.

The Bank of Japan is closely monitoring the wage negotiations scheduled for this spring, which will be key in determining future interest rate hikes, following last month’s adjustment to a level not seen in three decades.

Authorities indicated that December’s data will provide a clearer picture thanks to winter bonuses.

In 2024, real wages only showed year-on-year increases in June, July, November, and December, coinciding with the summer and winter bonus payments.

abo/jav/mem/msm