Japan' Real Wages Eased In January, Current Account Swung to Deficit

Akira Ito
10 Mar, 2025
Tokyo

Stock market indexes in Japan closed mixed on Monday following a week of turbulent trading. 

The Nikkei 225 stock average gained 0.4%, and the TOPIX decreased 0.3%, and the yen continued to retain an upward bias. 

The yen closed at 147.14 against the U.S. dollar as currency traders renewed their bets that the Bank of Japan is more likely to raise at the next policy meeting later in the month. 

Japan's real wages adjusted for inflation decreased 1.8% from a year ago in January, according to data released by the Ministry of Health, Labor, and Welfare. 

Nominal cash earnings, including base wages and overtime, increased 2.8% to 295,500 yen and advanced for the 37th consecutive month. 

However, the increase in wages was overshadowed by a 4.7% rise in consumer prices used for the salary and wage calculations. 

Higher food prices and the elimination of government subsidies for fuel played a key role in the rebound in inflation.

Real wages at businesses with 30 or more employees decreased 0.7% from a year ago in January, a decline for the first time in five months.

Investors are awaiting the spring wage negotiations results on Wednesday, and most large businesses are bracing for the wage growth to match the increase in the previous year.

The Electrical Electronic & Information Union, a labor union of workers, said it is prepared to settle for a wage increase of 10,000 yen per month, matching the increase in the last year and the highest since the record keeping began in 1998. 

Separately, Japan posted its first current account deficit in two years in January, after imports rose at a faster pace than exports, according to a preliminary report released by the Finance Ministry. 

The current account balance in January swung to a deficit of 257.6 billion yen, or $1.7 billion, from a surplus of 334.3 billion yen after a weaker yen played a key role in inflating imports. 

The widest measure of international trade swung to a deficit after Japanese companies stepped up imports of electronic parts from China ahead of the Lunar New Year. 

Exports rose 2.1% from a year ago to 7.5 trillion yen, imports advanced 17.7% to 10.44 trillion yen, and the trade deficit nearly doubled to 2.94 trillion yen.

Primary income, which tracks earnings from overseas investments by Japanese companies, soared 20.5% to 3.6 trillion yen, driven by higher dividends from international subsidiaries of the automotive corporations amid the yen's depreciation.

The ministry added that the yen weakened 6.8% from a year ago to 156.49 against the U.S. dollar in January. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average closed up 0.4% to 37,028.27, and the broader TOPIX fell 0.3% to 2,700.76.

Semiconductor equipment stocks advanced in Monday's trading following a rebound in tech stocks in Friday's trading in New York. 

Tokyo Electron rose 1.7% to ¥21,475.0, Advantest Corp. added 3.7% to ¥7,789.0, and Disco Corp. increased 1.7% to ¥33,020.0.

Seven & I Holdings increased 1.3% to ¥2,120.0, Isetan Mitsukoshi decreased 1.9% to ¥2,220.50, and Fast Retailing declined 0.7% to ¥45,660.0.