Wages Rise for Fourth Month on Overtime as Japanese Employers Limit Hiring

Japan’s wages rose for a fourth month as employers had staff work more hours instead of adding to payrolls, a trend that may sustain the recovery without reducing the economy’s reliance on exports to propel growth.

Monthly wages including overtime and bonuses increased 1.5 percent in June from a year earlier to 437,677 yen ($5,050), the Labor Ministry said today in Tokyo.

A gradual rebound in salaries will help support consumer spending in coming months, according to economist Yoshimasa Maruyama. That will reduce the damage from a lack of job gains after figures last week showed the unemployment rate rose to a seven-month high, driven by a lack of positions for young people.

“Recent increases in overtime pay reflect the economic recovery,” Maruyama, a senior economist at Itochu Corp. in Tokyo, said before today’s report. “But companies are holding off on meaningfully increasing personnel costs” until the economic outlook becomes clearer, he said.

Special pay, a category that includes bonuses, gained 3.3 percent to 173,851 yen, today’s report showed. Mid-year bonuses at large companies rose for the first time in three years, according to business lobby Keidanren.

While overtime hours climbed for a sixth month on a year- on-year basis, the figure for manufacturers dropped from a month earlier, reflecting a recent stalling of production. Factory output slumped 1.5 percent in June, the biggest decline in more than a year, the Trade Ministry said last week.