Japan's Real Wage Growth Retains Downward Trend In August

Akira Ito
08 Oct, 2025
Tokyo

Japan's indexes lacked direction, and investors reviewed the latest wage data and business confidence index. 

The Nikkei 225 Stock Average decreased 0.2%, and the Topix advanced 0.4%. 

Japan's real wages in August decreased for the eighth consecutive month, as inflation outpaced wage growth. 

Japan's nominal wage increase slowed to an annual 1.5% in August from 3.4% in the previous month, the Ministry of Health, Labour and Welfare said.  

The nominal wages, which include base and overtime pay, increased annually by 1.5% to 300,517 yen, or $2,000, and rose for the 44th consecutive month. 

After adjusting for consumer price inflation of 3.1%, real wages declined 1.4%, and the ministry said the future trend in real wages is likely to be driven by inflation's trajectory.  

 

Business Confidence Declined in October

The Reuters Tankan index for Japanese manufacturers declined to +8 in October from a three-year high of +13 in September, highlighting the first fall in four months as firms tackled U.S. tariffs and rising operating costs.  

The index measuring confidence is likely to continue to ease and drop to +4 in January.  

Of the nine manufacturing sectors surveyed, five reported a decrease in confidence. 

The auto and transport machinery sector indicated the sharpest decrease, with the sector's index dropping to +9 from +33. 

The vehicle and transportation industry, which accounts for one-third of the U.S. exports and employs about 8% of the workforce in Japan, dominates Japan's exports. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 0.2% to 47,834.65, and the Topix rose 0.4% to 3,241.81. 

Tokyo Electron decreased 2.9% to ¥29,225.0, Advantest Corp. declined 0.3% to ¥17,960.0, and Disco Corp. eased 1.7% to ¥52,310.0. 

Seven & I Holdings Co. Ltd rose 0.4% to ¥1,975.50, Fast Retailing rose 0.01% to ¥47,100.0, and Aeon Holding advanced 1.1% to ¥1,826.0.