— Japan Average Nominal Wage Posts 5th Straight Y/Y Rise
— Japan July Avg Base Wage Unrevised -0.3% Y/Y; June -0.2%
— Japan Average Base Wage Posts 23rd Y/Y Drop In Row
— Japan July Real Avg Wage Rev +2.4% Y/Y Vs +2.3%; June +2.7%
— Japan Real Average Wage Posts 7th Straight Y/Y Rise
— Japan July Regular Jobs Revised +0.5% Y/Y, 6th Rise In Row

TOKYO (MNI) – The total nominal average monthly cash earnings per
regular employee in Japan rose a revised 1.4% (preliminary +1.3%)
year-over-year to Y367,987 in July, posting the fifth straight y/y gain
and confirming a gradual wage recovery after sharp cuts, data from the
Ministry of Health, Labor and Welfare released on Wednesday showed.

The overall wage level was pushed up by overtime and summer bonuses
in both July and June, when it rose a sharp 1.8%. The 1.0% rise in total
cash earnings in March was the first y/y increase in 22 months.

Bonuses and other special pay rose a revised 3.8% (preliminary
+3.5%) in July from a year before, slowing from +4.1% in June but up
sharply from a 12.9% plunge in July 2009.

Overtime pay rose for the seventh month in a row, pushing up
overall compensation, although the “base wage” — the key indicator for
a recovery — still showed a slight drop from the year-earlier level.

Another indicator of a gradual improvement in the labor market was
the number of regular employees, which posted the sixth straight
year-on-year rise in July after showing the first gain in 10 months in
February.

Overtime pay in July rose a revised 12.4% (preliminary +12.1%)
year-on-year after a 12.2% gain in June, aided by gains in overtime
hours worked at factories (due to the plunge in early 2009). January’s
2.4% gain in overtime pay was the first y/y rise in 18 months.

Overtime hours worked and overtime pay hit bottom in March last
year, which means they are likely to show year-on-year growth for the
next several months due to a favorable base effect.

Average “base” salaries, or scheduled cash earning at surveyed
companies that employ five or more people, fell an unrevised 0.3% y/y in
July after falling 0.2% in June.

It marked the 23rd straight y/y drop, but the pace of decline has
been small in a range of -0.3% to -0.1% in recent months, shrinking from
-1.0% in February 2010.

In inflation adjusted terms, the total average wage rose a revised
2.4% (preliminary + 2.3%) y/y in July, following the 2.7% gain in June.

This was the seventh straight y/y gain, with real wages improving
gradually from the record drop of 5.2% posted in June 2009.

Overtime hours worked in the manufacturing sector posted the eighth
straight year-on-year rise in July, up by a revised 36.5% (preliminary
+35.6%) after surging 44.7% in June and posting the record growth of
57.3% in March. Overtime hours have recovered steadily from the record
drop of 48.9% in March 2009.

From the previous month, overtime hours worked at factories rose a
revised 0.5% (preliminary -0.2%) on a seasonally adjusted basis, showing
the first m/m rise in two months.

Overtime hours have been recovering rapidly 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 11.1%
(preliminary +9.9%) y/y in July following a 10.2% rise in June and a
record gain of +14.5% in March. January’s +4.4% was the first
year-on-year rise in 18 months.

Total hours worked for all industries continued to rise in July,
but only by an unrevised 0.1% y/y after rising 0.8% in June. The 0.4%
rise in January this year was the first y/y gain 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 clearer recovery in the labor market.

The number of regular workers rose a revised 0.5% (preliminary
+0.4%) from a year earlier in July, marking the sixth straight y/y rise
after rising 0.2% in June. The gain in February was the first y/y rise
in 10 months since +0.3% in April 2009.

The 0.5% y/y increase in July was the largest gain in more than a
year since +0.5% in March 2009.

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

Bonus and other special cash earnings, which tend to fluctuate
sharply, posted the second straight y/y rise, up by a revised 3.8%
(initially +3.5%) y/y in July vs. 4.1% in June. Special earnings
(Y104,556) accounted for 28.4% of the total cash earnings in July.

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

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