— Japan Jan Average Base Wages Unrevised -0.5%, 1st Drop In 2 Mo

TOKYO (MNI) – The total nominal average monthly cash earnings per
regular employee in Japan rose a revised 0.4% (preliminary +0.2%)
year-on-year to Y273,079 in January, posting the 11th straight y/y gain,
data from the Ministry of Health, Labor and Welfare released on
Wednesday showed.

In the final report for January, a slight downward revision to
bonuses and other special pay was more than offset by an upward revision
to overtime pay.

The year-on-year growth in total cash earnings accelerated from
+0.1% in December. 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 rose a revised 12.0% (preliminary
+12.3%) in January from a year before, posting the first y/y gain in
three months.

Meanwhile, overtime pay rose for the 13th month in a row, pushing
up overall compensation, although the “base wage” — the key indicator
for a recovery — fell an unrevised 0.5% on year. Base wages rose 0.1%
in December, the first y/y gain since +0.1% in April 2008.

Overtime pay in January rose a revised 3.6% (preliminary +2.5%)
year-on-year, slower than the 6.3% gain in December. A 2.4% gain in
overtime pay in January 2010 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.

In inflation adjusted terms, the total average rose a revised +0.2%
y/y (preliminary +0.1%) in January, following the 0.1% fall in December.

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

Overtime hours worked in the manufacturing sector posted the 14th
straight year-on-year rise in January, up by a revised 7.4%
(preliminary +6.6%) after rising 11.4% in December 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 a revised 4.2% (preliminary +3.4%) on a seasonally
adjusted basis, showing gains for three months in a row.

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 a revised 3.2%
(preliminary +2.1%) y/y in January, following a 5.1% rise in December
and a record gain of +14.5% in March 2010. The 4.4% gain 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 an unrevised 0.8% from a year
earlier, marking the 12th straight y/y rise after rising 0.6% in
December. The gain in February 2010 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.

tokyo@marketnews.com
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