— Japan Average Wages Post 21st Straight Y/Y Drop; Jan -0.2%
— Japan Feb Real Avg Wages Revised to +0.6% Y/Y Vs +0.8%; Jan +1.2%
— Japan Real Average Wage Posts 2nd Straight Y/Y Rise
— Japan Feb Revised Regular Employment Posts 1st Y/Y Rise In 10 Months

TOKYO (MNI) – The average monthly total cash earnings per regular
employee in Japan fell to Y264,261 in February, down by a revised 0.7%
year-on-year (preliminary -0.6%), posting the 21st straight drop in a
row, data from the Ministry of Health, Labor and Welfare released on
Friday showed.

The pace of the y/y drop accelerated from -0.2% in January because
the delayed year-end bonus payment included in the January data fell out
of the calculation in February.

Last month the ministry also said year-end bonuses for 2009 (paid
from November 2009 through January 2010) fell by a record 9.3% from a
year earlier to an average Y380,258, following a gain of 1.0% in 2008.

Summer bonuses for 2009 had also posted a record drop of -9.7%.

Still, the latest data showed some continued improvement in the
wage situation: overtime pay rose for the second month in a row, pushing
up overall compensation, although the average “base wage” — the key
indicator for a recovery — remained below a year earlier.

Also on the bright side, the number of regular employees posted the
first year-on-year rise in 10 months in the revised data, showing a sign
of a gradual recovery in the labor market.

Overtime pay in February jumped by a revised 8.1% compared to a
year earlier (initially +8.7%), aided by a jump in overtime hours worked
at factories (payback for the plunge in early 2009). January’s 2.4% gain
in overtime pay was the first y/y gain in 18 months.

Overtime hours worked and overtime pay hit bottom in March last
year, which means they will show year-on-year growth for the next few
months. But the government has said it cannot yet confirm whether Japan
is out of the woods in terms of wage cuts.

In inflation adjusted terms, the average total wage rose a revised
0.6% y/y (preliminary +0.8%) in February after a 1.2% gain in January.
This was the second straight y/y gain as prices of goods and services
continued to drop faster than nominal wages. Real wages have improved
gradually from the record drop of 5.2% posted in June last year.

Overtime hours worked in the manufacturing sector posted the third
straight year-on-year rise in February, surging by a fresh record
increase of 54.6% (unrevised), surpassing the previous record growth of
31.1% hit in January 2010 and recovering steadily from the record drop
of 48.9% in March 2009.

Moreover, overtime hours at factories rose an unrevised 0.7%
month-on-month on a seasonally adjusted basis, the 11th straight m/m
rise, although the pace of growth slowed from +7.4% in January.

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

As a result, overtime hours worked for all industries rose by a
record 11.4% (unrevised) in February after a 4.4% gain in January, which
was the first year-on-year rise in 18 months.

Total hours worked for all industries continued to improve in
February, up by a revised 0.6% (preliminary +1.0%) after a 0.4% gain in
January, which was the first y/y gain in 18 months.

Three years of steady job creation until April 2009 had been
replaced by job losses or flat employment levels, but the revised
February data indicated a recovery in the labor market.

The number of regular workers rose by 0.2% in February, revised up
from the initial estimate of being unchanged after a 0.2% decline year
on year in January. It was the first y/y gain 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.

Average “base” salaries, or scheduled cash earnings, at surveyed
companies that employ five or more people fell a revised 1.0%
(preliminary -0.9%) y/y in February vs. -0.8% in January, down for the
19th straight month.

Bonus and other special cash earnings, which tend to fluctuate
sharply, fell a revised 26.1% (preliminary -25.6%) y/y in February vs. a
gain of 8.4% in January.

** Market News International Tokyo Newsroom: 81-3-5403-4437 **

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