— Japan May Nominal Avg Wage Revised From -0.2%; April +1.6%
— Japan May Avg Base Wage Unrevised -0.1% Y/Y Vs April -0.2%
— Japan May Real Average Wage Revised +1.1% Y/Y; Apr +3.0%
— Japan Real Average Wage Posts 5th Straight Y/Y Rise
— Japan May Regular Employment Unrev +0.4% Y/Y, 4th Rise In Row

TOKYO (MNI) – The total nominal average monthly cash earnings per
regular employee in Japan rose by a revised 0.1% year-over-year
(preliminary -0.2%) to Y268,592 in May, posting the third straight y/y
gain and confirming a gradual wage recovery after sharp cuts, data from
the Ministry of Health, Labor and Welfare released on Friday showed.

This followed a 1.6% rise in April and a 1.0% rise in March, the
latter being the first y/y increase in 22 months.

Overtime pay rose for the fifth 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 fourth straight
year-on-year rise in May after showing the first gain in 10 months in
February.

Overtime pay in May rose a revised 11.3% (preliminary +10.3%)
year-on-year after a 12.4% gain in April, 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 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 0.1% y/y in
May after falling 0.2% in March. It marked the 21st straight y/y drop,
but the pace of decline has decelerated recently.

In inflation adjusted terms, the total average wage rose a revised
1.1% (preliminary +0.7%) y/y in May, decelerating from the 3.0% gain in
April.

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

Overtime hours worked in the manufacturing sector posted the sixth
straight year-on-year rise in May, surging by an unrevised 46.7% after
rising 53.4% in April and posting record growth of 57.3% in March.
Overtime hours have recovered steadily from the record drop of 48.9% in
March 2009.

Overtime hours worked at factories rose an unrevised 0.6%
month-on-month on a seasonally adjusted basis after showing a rare 0.6%
fall in April, marking the first m/m gain 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 an unrevised
10.4% y/y in May following a 11.9% rise in April 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 May, up
by an unrevised 1.3% after rising 1.6% in April. 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 last year,
but the latest data indicate a clearer recovery in the labor market.

The number of regular workers rose by an unrevised 0.4% in May
after rising 0.1% in April. 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.

Bonus and other special cash earnings, which tend to fluctuate
sharply, fell a revised 13.6% (preliminary -23.6%) y/y in May after a
46.1% surge in April.

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

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