Japan Economics: June Monthly Labour Survey: Positive Real Wage Growth and the Broadening of Wage Hikes

Research evidence excerpt

M

Update

August 5, 2026 05:22 AM GMT

Japan Economics | Japan

Morgan Stanley MUFG Securities Co., Ltd.

Masayuki Inui

Economist

June Monthly Labour Survey:

Positive Real Wage Growth and

the Broadening of Wage Hikes

Takeshi Yamaguchi

Chief Japan Economist

Key Takeaways

Positive real wage growth continues to gain traction

Real employee income on a common-establishment basis reaches the 3% range

for the first time since 2021

Watching the propagation of wage-hike momentum to SMEs

Real wages, deflated by the CPI excluding imputed rent, rose 1.6%Y and have

remained consistently positive since January. On a headline CPI basis, real wages

increased 1.7%Y. Nominal scheduled cash earnings also accelerated to 3.4%Y from

3.0%Y in the previous month and have remained in the 3% range in every month

since January. Taken together, these developments suggest that positive real wage

growth is gradually becoming more firmly established. In addition, real employee

income on a common-establishment basis increased 3.2%Y. Although this is a

preliminary estimate and may be revised in the final release, it marked the first

increase in the 3% range since 2021 ( Exhibit 1 ).

The final tally for the 2026 shunto wage negotiations showed a base-pay increase of

3.5%, slightly below the 3.7% recorded in the previous year. Meanwhile, scheduled

cash earnings on a common-establishment basis increased 3.0%Y. Because the

shunto sample is weighted toward large companies, the gap between growth in

scheduled cash earnings in the Monthly Labour Survey and the shunto base-pay

increase would provide one gauge of the extent to which wage increases at small

and medium-sized enterprises (SMEs), which have a greater representation in the

Monthly Labour Survey, are catching up with those at large companies.

The results of the shunto wage negotiations tend to be reflected more fully in the

Monthly Labour Survey from the May data onward. We will therefore monitor

whether the gap between the two measures narrows further for indications of the

extent to which wage-hike momentum is spreading to SMEs ( Exhibit 2 ). In the final

tally for the 2026 shunto, the average base-up was 3.50%, while the increase for

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