Quotes from Capital Economics:
- In contrast to expectations of a slowdown, preliminary data showed that wage growth remained unchanged at 1.3% y/y in January. (Data released on Tuesday.) Base pay increased by 0.8% y/y, the strongest expansion since 2008.
- However, regular earnings tend to be overstated in the preliminary estimate. Bonus payments jumped by 10.8% y/y, but their contribution to headline wage growth halved as their weight in total pay plunged. Finally, overtime pay rose at the fastest pace since last July - a strong indication that the labour market remains tight.
- The ongoing spring wage negotiations (Shunto) should result in a stronger rise in base pay than a year ago, so wage growth may pick up further in coming months.
