May 1, 2007 / 2:49 AM / 13 years ago

UPDATE 2-Japan March total cash earnings, overtime pay fall

 (Adds Reuters poll, economists' comments)
 TOKYO, May 1 (Reuters) - Japanese wage earners' total cash
earnings fell slightly in March from a year earlier for the
fourth month in a row, data showed on Tuesday, cementing views
that the Bank of Japan (BOJ) will go slow in raising interest
rates amid tame wages and prices.
 Total cash earnings, which include overtime pay, monthly
wages and special payments, fell 0.4 percent in March from a year
earlier to 281,158 yen ($2,352).
 That followed a revised 1.0 percent fall in February, data
released by the Ministry of Health, Labour and Welfare showed.
 "The data confirms the trend that wage earners' incomes have
remained poor," said Yoshiki Shinke, an economist at Dai-ichi
Life Research Institute. "Companies are reluctant to pass on
corporate earnings to workers partly because of shareholders'
demands that they use profits to pay more dividends or boost
capital spending."
 Economists also say that an increase in part-timers and young
workers who are replacing baby-boomers hitting the standard
retirement age of 60 have also put downward pressure on average
 Average overtime pay, a barometer of income conditions,
slipped 0.4 percent in March from a year earlier to 19,806 yen,
marking the first year-on-year drop in 56 months.
 Regular pay fell 0.9 percent to 248,850 yen, declining for
the 11th straight month.
 Japan's economy is in its longest period of expansion
of the post-war era, albeit at a slower pace than previous booms,
on the back of solid exports and robust corporate capital
 Sluggish wage gains have been blamed for a lack of strength
in personal consumption, which accounts for about 55 percent of
the nation's economy, and tame rises in prices.
 Wage growth is thus closely watched by the central bank,
which raised interest rates to a decade-high 0.5 percent in
February on the view that the economy is expanding steadily with
prices in an uptrend.
 "If wage gains remain sluggish, personal consumption will
also stay weak, so the data provided another factor for the BOJ
to hold off from raising rates until later in the year," said
Yasuo Yamamoto, a senior economist at Mizuho Research Institute.
 Both Yamamoto and Dai-ichi Life's Shinke said they expect the
BOJ to move in October given weakness in wages, consumption and
 The central bank has said it will raise rates gradually if
the economy remains in good shape. Many analysts expect the next
rate hike to come in July-September at the earliest.
 A Reuters survey of 52 traders and analysts in Tokyo's
foreign exchange and bond markets released on Friday showed 27
expecting the next rate hike in the third quarters of this year,
with 28 anticipating a further rate hike in January-March 2008.
(Click on [BOJ/INT] for the Reuters poll.)
 In terms of hours worked, overtime in March rose 1.8 percent
from a year earlier to 11.3 hours, the data showed.
 The number of full-time employees rose 1.2 percent
year-on-year, while part-time workers were up 2.5 percent, a sign
that Japan's labour market is getting tighter.
 The following table shows preliminary data for monthly
incomes, working hours and numbers of workers in March, with
year-on-year percentage changes (some previous figures are
                                      MARCH       FEB
 Payments (yen)                          yr/yr change(pct)
 Total cash earnings   281,158 yen       -0.4       -1.0
Monthly wage        268,656 yen       -0.9       -0.5
 -Regular pay       248,850 yen       -0.9       -0.6
 -Overtime pay       19,806 yen       -0.4       +1.0
 -Special payments   12,502 yen      +12.5      -27.0
 Working hours
  Overall                150.9 hours     -1.4       -1.2
  -Regular               139.6 hours     -1.6       -1.4
  -Overtime               11.3 hours     +1.8       +1.9
 Number of workers (million)
  Overall                 43.503 mln     +1.4       +1.6
  -general employees      32.257 mln     +1.2       +0.7
  -part-time employees    11.246 mln     +2.5       +4.2
 Note: *indicates price-adjusted.
 The ministry defines "workers" as 1) those who are employed for
more than one month at a firm that employs more than five
people, or 2) those who are employed on a daily basis or have
less than a one-month contract but had worked more than 18 days
during the two months before the survey was conducted at a firm
that employs more than five people.
 To view the full tables, please go to the Web site of the
Ministry of Health, Labour and Welfare here

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