Japan’s nominal wages rose 1.9% year-on-year in September 2025, up from a 1.5% gain in August and in line with market forecasts, supported by steady base pay and a modest rise in overtime compensation. However, wage growth continued to trail the 3.4% increase in consumer prices, which accelerated for the first time since April. Real wages, adjusted for inflation and viewed as a key gauge of household purchasing power, fell 1.4% from a year earlier, marking the ninth straight monthly decline. Bank of Japan Governor Kazuo Ueda said the 2026 wage outlook will be critical in deciding when to resume tightening. Meanwhile, new Prime Minister Sanae Takaichi reiterated that Japan has yet to achieve sustainable inflation underpinned by solid wage gains, signaling her government’s cautious stance toward further rate hikes.