Labor cash earnings jump the most since 1997
The big surprise in economic data today was the jump in Japanese wages to 3.6% from 2.1%. It's the highest since 1997 and crushed the 1.7% y/y expected.
In real terms, they rose 2.8% compared to 0.9% expected.
So is this some kind of turning point for Japanese workers, wages and inflation? Probably not.
Much of the rise was due to unusual overtime and bonus payments. If those are removed, wages rose 1.3% year-over-year which is still a big jump in Japanese terms but it's not as impressive.
The market reaction also told the story with little movement in the yen or Japanese stock markets. But combined with talk of rate hikes, Japan is suddenly a very interesting place.
I'd argue that the middle of August is the time of year where markets get sleepy and the way to to take advantage is by keeping an extra-close eye on the day.
