TOKYO, March 9 (Reuters) - Japan's real wages climbed in January for the first time in 13 months as inflation cooled, with base salaries growing at their fastest pace in 33 years, government data showed on Monday.
The positive turn strengthens the case for the Bank of Japan to keep raising interest rates and normalise monetary policy. It last hiked in December to 0.75%, a level still very low compared to most economies.
Inflation-adjusted real wages, a key barometer of consumer purchasing power, rose
1.4% in January from a year earlier, rebounding from a 0.1% decline in December.
Average nominal wages, or total cash earnings, increased 3.0% year-on-year to 301,314 yen ($1,911), marking their fastest pace since July and accelerating from December's 2.4% gain.
The pay growth was enough to outpace the consumer inflation rate the ministry uses to calculate real wages. That was 1.7% in January, the slowest gain since March 2022, thanks to fuel subsidies and fewer food price hikes.
Regular pay or base salary grew 3.0%, the biggest rise since October 1992 and up from a revised 2.1% in December. Overtime pay jumped 3.3%, rising from a revised 1.5% the previous month to its highest level in about three years.
Special payments, consisting mostly of one-time bonus payments, increased 3.8% in January, up from December's revised 2.7%.
The upbeat wage data comes as the central bank convenes for a rate review on March 18-19, coinciding with the conclusion of this year's wage negotiations. It has said it will focus on whether wage gains will broaden and give households purchasing power when judging how soon to hike rates.
Japan's largest union group, Rengo, last week said its member unions are seeking an average wage hike of 5.94%, underscoring strong momentum after an average 5.25% raise in 2025, their biggest in 34 years.
($1 = 157.6500 yen)
(Reporting by Kantaro Komiya; Editing by Edwina Gibbs)
