— Japan Aug Bonus, Other Special Pay -10.7% Y/Y; July +3.8%
— Japan Aug Average Base Wage -0.1% Y/Y Vs July -0.3%
— Japan Average Base Wage Posts 24th Y/Y Drop In Row
— Japan Aug Real Average Wage +0.9% Y/Y Vs July +2.4%
— Japan Real Average Wage Posts 8th Straight Y/Y Rise
— Japan Aug Regular Jobs +0.5% Y/Y, 7th Rise In Row

TOKYO (MNI) – The total nominal average monthly cash earnings per
regular employee in Japan were unchanged year-over-year at Y274,232 in
the preliminary August reading after posting the fifth straight y/y gain
in July (+1.4%) as the effects of summer bonuses and the recent recovery
in overtime waned, data from the Ministry of Health, Labor and Welfare
released on Monday showed.

The overall wage level was pushed down by a slower pace of
year-on-year growth in overtime pay and a drop in special payments
including bonuses after wages were boosted by a recovery in summer
bonuses in June and July.

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 slumped 10.7% in August from a year
before, down from +3.8% in July but was still up from a 13.8% plunge in
August 2009.

Meanwhile, overtime pay rose for the eighth 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 seventh straight
year-on-year rise in August after showing the first gain in 10 months in
February.

Overtime pay in August rose 10.8% year-on-year, slower than the
12.4% gain in July, as the pace of increase in overtime hours worked at
factories, the main booster of wages, decelerated. 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 2009,
which means they are still likely to show year-on-year growth for now
due to a favorable base effect.

Average “base” salaries, or scheduled cash earning at surveyed
companies that employ five or more people, fell 0.1% y/y in August after
falling 0.3% in July.

It marked the 24th 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 0.9% y/y
in August, following the 2.4% gain in July.

This was the eighth 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 ninth
straight year-on-year rise in August, up by 29.0% after surging 36.5% in
July 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
0.3% on a seasonally adjusted basis, showing the fourth straight m/m
rise after +0.5% in July.

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 8.9% y/y in
August following a 11.1% rise in July and a record gain of +14.5% in
March 2010. January’s +4.4% was the first year-on-year rise in 18
months.

Total hours worked for all industries continued to rise in August,
up by 1.9% y/y after rising only 0.1% in July. 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 0.5% from a year earlier in
August, marking the seventh straight y/y rise after rising 0.5% in July.
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 August and 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 first y/y drop in three months, down by 10.7% y/y in
August vs. +3.8% in July.

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

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