— Japan Average Wage Posts 21st Straight Y/Y Drop
— Japan Feb Real Avg Wages +0.8% Y/Y Vs Jan +1.2%
— Japan Real Average Wage Posts 2nd Straight Y/Y Rise

TOKYO (MNI) – Average monthly total cash earnings per regular
employee in Japan fell to Y244,247 in February, down 0.6% year-on-year,
posting the 21st straight in a row, preliminary data from the Ministry
of Health, Labor and Welfare released on Wednesday showed.

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

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.

Overtime pay in February jumped 8.7% compared to a year earlier,
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 a 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
preliminary 0.8% y/y 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 from the
record drop of 5.2% posted in June last year.

The 0.6% gain in September 2009 was the first year-on-year rise in
the average real wage in 25 months, with real wages on a general
downtrend since July 2006.

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%, surpassing the previous record growth of 31.1% hit in
January and recovering steadily from the record drop of 48.9% in March
2009.

Moreover, overtime hours at factories rose 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% 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 1.0% after a 0.4% gain in January, which was the first y/y
gain in 18 months.

However, three years of steady job creation until April 2009 has
been replaced by job losses or flat employment levels.

The number of regular workers was unchanged in February, a 0.2%
year-on-year decline in January, the seventh drop in a row.

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 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 25.6% y/y in February vs. a gain of 8.4% in January.

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

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