Yen Boosted By Strong Japanese Wage Increase Data

The Japanese Yen traded higher against its US counterpart in overnight trading, following the release of some strong Japanese wage increase data.

In a report issued by the Japanese Ministry of Health, Labour and Welfare, official data showed on Tuesday that the Japanese wage increased in February on a yearly basis for the first time in four months. The news was welcomed by analysts who took it as a strong indication that consumer spending in the world’s third largest could well increase.

Japanese Wage Data

Real wages, which after adjusting for inflation increased 0.4 percent in February from the same time a year ago. This was the first increase recorded since October 2015.
Nominal cash earnings increased 0.9 percent in February on a yearly basis, which was also the first gain since October. Regular pay (base salaries), increased 0.6 percent annually, whilst overtime pay increased at an annual rate of 0.4 percent.

Abenomics

Japan is very much a consumer driven economy, so the Japanese wage increase data could well provide more spending power within the domestic market. The latest set of figures also provide a welcome boost to Japanese Prime Minister Shinzo Abe. A key feature of his so called ‘Abenomics’ has to been to battle deflation and increase worker compensation.

At time of writing, the USD/JPY was down 0.45%, trading at 110.85.

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Daniel Simmons