Japan's Real Wages Turned Positive After Seven Months In July, Nikkei 225 Extended Weekly Gains

Akira Ito
05 Sep, 2025
Tokyo

Japan's market indexes advanced on Friday and extended weekly gains after real wages rose for the first time this year. 

The Nikkei 225 Stock Average increased 0.6%, and the broader Topix advanced 0.4% as investors welcomed the lower U.S. tariffs on automobiles.

Japan's nominal wages in July rose 4.1% from a year ago, to 419,661 yen, or $2,800, the Ministry of Health, Labor and Welfare said. 

Nominal wages, or the average total cash earnings including base and overtime pay, rose for the 43rd month in a row. 

The increase in nominal wages was driven by a 7.9% jump in special earnings, which largely reflects bonuses, to 128,618 yen.

 

Japan's Real Wages Turn Positive After Seven Months in July

Real wages, after adjusting for inflation, inched higher 0.5% and turned positive for the first time in seven months, according to the data released by the ministry on Friday.

Consumer price inflation, used for the calculation of wages, increased to 3.6%, limiting the purchasing power of the consumer, a key metric for the economic expansion. 

A separate report from the ministry showed household spending in July increased a real 1.4% from a year ago, said the Ministry of Internal Affairs and Communications.

Average spending by households of two or more people in July was 305,694 yen.

Household spending, which accounts for more than half of Japan's gross domestic product, is closely watched by economists. 

 

Japan Indexes and Markets 

The Nikkei 225 Stock Average rose 0.6% to 42,848.91, and the broader Topix added 0.4% to 3,093.14. 

Automobile stocks advanced after the U.S. president signed an executive order lowering tariffs to 15% from 27.5% and acknowledged $550 billion in Japanese investments in U.S. projects. 

However, two separate courts have ruled that Donald Trump overstepped his executive authority in imposing sweeping tariffs, requiring the U.S. Supreme Court to weigh in. 

Toyota Motor Corp. increased 1.5% to ¥2,949.50, Honda Motor Co. Ltd. gained 0.9% to ¥1,689.0, and Nissan Motor Co. Ltd. advanced 2% to ¥344.30.