–Japan Dec Average Base Wages Revised +0.1% Y/Y; Prelim +0.3%
–Japan Avenge Base Wages Post 1st Y/Y Rise In 32 Months
–Japan Dec Real Average Wages Revised -0.1% Y/Y; Prelim -0.5%
–Japan Dec Special Pay -0.4%% Y/Y Vs Prelim -1.4%; Nov -2.3%
–Japan Dec Regular Jobs Revised +0.6% Y/Y, 11th Rise In Row

TOKYO (MNI) – The total nominal average monthly cash earnings per
regular employee in Japan rose a revised 0.1% (preliminary -0.4%)
year-on-year to Y550,923 in December, posting the 10th straight y/y
gain, data from the Ministry of Health, Labor and Welfare released on
Tuesday showed.

In 2010, the total average cash earnings rose 0.6% on year, marking
the first rise in four years, following a 3.8% drop in 2009, confirming
the gradual improvement in the labor market.

In the final report for December, a slight downward revision to
“base” salaries was more than offset by upward revisions to both the
drop in special pay (mostly year-end bonuses) and the growth in overtime
pay.

The year-on-year growth in total cash earnings decelerated from
+0.2% in November. The 1.0% rise in total cash earnings in March 2010
was the first y/y increase in 22 months.

Bonuses and other special pay fell a revised 0.4% (preliminary
-1.4%) in December from a year before, posting the second straight y/y
drop.

Meanwhile, overtime pay rose for the 12th month in a row, pushing
up overall compensation. The “base wages” — the key indicator for a
recovery — rose 0.1% on year, revised downward from the initial reading
of +0.3%.

Average base wages, or scheduled cash earnings at surveyed
companies that employ five or more people, posted the first gain in
32 months.

Overtime pay in December rose a revised 6.3% (preliminary +4.9%)
year-on-year, slightly slower than the 6.4% gain in November. The 2.4%
gain in overtime pay seen in January 2010 was the first y/y rise in 18
months.

Overtime hours worked and overtime pay hit bottom in March 2009,
which means they are still likely to show year-on-year growth for now
due to a favorable base effect.

In inflation adjusted terms, the total average cash earnings showed
a 0.1% drop on year in the revised data (preliminary -0.5%) in December,
after being unchanged in November.

The real average wages have recovered from the record drop of 5.2%
marked in June 2009.

Overtime hours worked in the manufacturing sector posted the 13th
straight year-on-year rise in December, up by a revised 11.4%
(preliminary +10.6%) after rising 13.8% in November and posting
the record growth of 57.3% in March 2010. Overtime hours have recovered
steadily from the record drop of 48.9% in March 2009.

From the previous month, overtime hours worked in the manufacturing
sector rose a revised 2.8% (preliminary +2.2%) on a seasonally adjusted
basis, showing gains for two months in a row.

Overtime hours have been recovering since October 2009, led by the
automobile and electronics sectors. This has pushed up the level of
overtime pay.

Total overtime hours worked for all industries rose a revised 5.1%
(preliminary +3.1) y/y in December, following a 6.1% rise in November
and a record gain of +14.5% in March 2010. January’s +4.4% was the first
year-on-year rise in 18 months.

Three years of steady job creation until April 2009 were replaced
by job losses or flat employment levels through the end of 2009, but the
latest data indicate a recovery in the labor market.

The number of regular workers rose a revised 0.6% (preliminary
+0.5%) from a year earlier, marking the 11th straight y/y rise after
rising 0.7% in November. The gain in February 2010 was the first y/y
rise in 10 months since +0.3% in April 2009.

Cash earnings include overtime and bonuses. Regular employees are
workers on permanent payrolls as well as those with part-time status.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4437 **

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