Japan's Real Wages Advanced and Household Spending Eased In May

Akira Ito
07 Jul, 2026
Tokyo

Japan's indexes fell sharply as weakness in technology stocks weighed on the broader market for the second session in a row. 

The Nikkei 225 stock average declined 1.8%, the broader TOPIX decreased 0.7%, and the yen hovered near 162 against the U.S. dollar. 

Semiconductor equipment makers receded for the second consecutive week as investors questioned the durability of the AI infrastructure investment level. 

On the economic front, Japan's nominal wages rose and household spending declined in May, according to the latest data released by two separate ministries. 

Nominal wages per worker, including base and overtime pay, increased 3.2% to 311,165 yen, or $1,900, marking the growth above 3% for the fourth consecutive month, according to the Ministry of Health, Labor, and Welfare.

Of the nominal wages, scheduled pay increased 3.0% to 275,942 yen, and overtime pay advanced 2.9% to 20,003 yen, according to the latest report released by the ministry. 

However, real wages rose 1.4%, decelerating from the upwardly revised 2.0% in April, largely fewer working days in the month because of Golden Week holidays from late April through early May. 

Real wages rose for the fifth month in a row after falling for years through 2025; however, concerns over the higher food and fuel prices because of the conflict in the Middle East persist, complicating additional wage increases.

Households of two or more people spent an average of 320,345 yen, decreasing 0.4% after adjusting for inflation from a year ago, the Ministry of Internal Affairs and Communications said.

After a decade of unorthodox negative interest rates that ended in March 2024, the Bank of Japan is looking to normalize its monetary policy following the sustained wage growth and rising household consumption.

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average dropped 1.8% to 68,465.72, and the broader TOPIX declined 0.7% to 4,074.05. 

Semiconductor-related stocks dropped sharply in Tokyo's trading, as investors stayed on the sidelines. 

Kioxia Holdings decreased 11.3%, Taiyo Yuden fell 11.1%, Murata Manufacturing fell 10.2%, and Ibiden Co. dropped 7%.