Japan's real wages extend gains, consumer spending decline slows in April

By Satoshi Sugiyama

TOKYO, June 5 (Reuters) - Japan's real wages climbed 1.9% in April from a year earlier, government data showed on Friday, marking a fourth consecutive monthly gain, as higher special payments boosted overall earnings and improved household purchasing power.

Here are a few details:

* The Bank of Japan, which will next review its interest rates on June 15 and 16, considers steady rises in wages and prices as a prerequisite for another hike. The Japanese central bank is expected to raise interest rates this month unless a sharp escalation in the Middle East conflict roils markets, sources told Reuters.

* Special payments, consisting mostly of one-time bonus payments, jumped 7.4% in April after a revised 0.7% fall for March.

* A labour ministry official said, in addition to the boost from special payments, steady growth in nominal wages and easing inflation have helped lift real wages.

* Average nominal wages (total cash earnings) rose 3.5% year-on-year to 312,425 yen ($1,953.88), marking the fastest growth since December 2024. This followed a revised 3.1% increase in March, and represents the first time in over 34 years that wage growth has exceeded 3% for three consecutive months.

* The inflation rate, used by the ministry to calculate the headline real wage indicator, eased to 1.5% in April from a 1.6% gain in March, staying below the BOJ's 2% target for a fourth consecutive month.

* Consumer inflation in Japan has been easing as government subsidies offset rising import costs from a weak yen, as well as surging oil prices due to the Iran war.

* Workers' base salaries, or regular pay, grew 3.4% in April, unchanged from the revised figure in the previous month. Base pay for full-time workers grew more than 3% for a fourth consecutive month.

* Overtime pay rose 4.2% in April, up from a revised 3.1% gain in March.

* Meanwhile, Japanese household spending fell less than expected in April from a year earlier, internal affairs ministry data showed, extending a decline streak to five straight months.

* Consumer spending dipped 0.5% year-on-year, beating the median market forecast for a 1.5% drop and posting the smallest decline in five months.

* On a seasonally adjusted, month-on-month basis, spending grew 1.6% versus an estimated 0.8% rise.

($1 = 159.9000 yen) (Reporting by Satoshi Sugiyama; Editing by Sherry Jacob-Phillips and Sam Holmes)