Labor Cash Earnings y/y show the change in the average income per one full-time employee (taxes are not included) in the current month compared to the same month of the previous year. The calculation includes overtime pay and bonuses and does not include income from dividends and financial assets.
Average wage growth reflects economic expansion. The index is used to measure inflation. The index value that exceeds the forecast value has positive effects on yen.
In Japan, despite the economic upturn, changes in wages of workers are very weak. This is a social problem, as Japanese companies continue to hold internal reserves. Also, Japan used to be called an all-middle-class society, and many people had similar incomes, but the gap has been widening since 2000s. Therefore, the distribution of wage income is a graph with two mountains.
The minimum wage varies depending on the area, but it is almost always around 1000 yen/h. In addition, overtime pay is often not paid fairly in Japan, but many Japanese still do not strike or change jobs. As the law makes it difficult to lower wages once they are raised, the profits distributed to workers are often paid with bonuses. Data on some wages in the 2010s has been erased because the government has tampered with it.
The chart of the entire available history of the "Japan Labor Cash Earnings y/y" macroeconomic indicator. The dashed line shows the forecast values of the economic indicator for the specified dates.
A significant deviation of a real value from a forecast one may cause a short-term strengthening or weakening of a national currency in the Forex market. The threshold values of the indicators signaling the approach of the critical state of the national (local) economy occupy a special place.
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