— Japan Dec Average Base Wages +0.3% Y/Y Vs Dec -0.1%
— Japan Average Base Wages Post 1st Y/Y Rise Since April 2008
— Japan Dec Real Average Wages -0.5% Y/Y Vs Nov Unchanged
— Japan Dec Special Pay -1.4%% Y/Y Vs Nov -2.3%
— Japan Dec Regular Jobs +0.5% Y/Y, 11th Rise In Row; Nov +0.7%

TOKYO (MNI) – The total nominal average monthly cash earnings per
regular employee in Japan fell 0.4% year-on-year to Y548,381 in
December, posting the first drop in 10 months, data from the Ministry of
Health, Labor and Welfare released on Tuesday showed.

Increases in “base” wages and overtime pay were more than offset
by a slump in special pay, which comprises largely bonuses paid in the
summer and at year-end.

The year-on-year change in total cash earnings turned negative
after rising 0.2% in November, the ninth straight y/y rise. 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 1.4% in December, posting the
second consecutive y/y fall, following -2.3% in November.

A ministry official said the special pay figure for December could
be revised upward when the ministry releases final figures later this
month.

“Base wages” — the key indicator for a recovery — rose 0.3% on
year, showing the first y/y rise since April 2008, following -0.1% in
November.

Despite the rise base wages, the ministry has yet to change its
cautious view on the slow recovery in the labor market until it sees
revised wages data for December, said the official.

In inflation adjusted terms, the total average cash earnings fell
0.5% on year, after being unchanged in November.

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

Meanwhile, overtime pay rose 4.9% on year, following +6.4% in
November, posting gains for 12 straight 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.

Overtime hours worked in the manufacturing sector posted the 13th
straight year-on-year rise in December, up by 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 2.2% on a seasonally adjusted basis, showing rises in two
straight months, following +1.8% in November.

Total overtime hours worked for all industries rose 3.1% in
December after +6.1% in November, showing y/y gains for 12 consecutive
months. The 4.4% rise in January 2010 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 0.5% in December, after showing
a revised 0.7% in November, marking the 11th straight y/y rise. The gain
in February 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.

The ministry also released 2010 wages data, which showed a gradual
recovery in the labor market.

The total nominal average monthly cash earnings per regular
employee in Japan rose a preliminary 0.5% in 2010 from the previous
year, posting the first rise in four years after -3.8% in 2009.

But average base wages fell 0.2% on year in 2010, marking the fifth
year of decline after -1.3% in 2009.

Overtime hours worked, which have pushed up overall cash earnings
in recent months, posted the first rise in three years, up 8.9% in 2010
on year, following -15.2% in 2009. Overtime pay rose 9.1% in 2010, also
the first gain in three years after -13.5% in 2009.

Bonuses and other special pay increased 1.5% in 2010 vs. -11.8% in
2009, marking the first rise in four years.

The number of regular workers rose 0.3% in 2010, up for the seventh
straight year after +0.2% in 2009.

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

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