Japanese nominal wage growth slowed, supporting the cautious stance of the Bank of Japan on raising interest rates.

Wage growth in Japan slowed more than expected in March, and early April trade data also showed a slowdown in export growth. Against the backdrop of rising economic risks both domestically and internationally, the Bank of Japan has even more reason to proceed with caution in raising interest rates. The Ministry of Health, Labor and Welfare announced on Friday that nominal cash income in March increased by 2.1% year-on-year, lower than the revised 2.7% in February and lower than the estimated median of 2.5%. Real wages further decreased by 2.1%, highlighting the continued decline in household purchasing power. The Ministry of Finance also revealed that the export growth rate slowed to 2.3% year-on-year in the first 20 days of April, indicating that the tariff actions by President Trump have had some initial impact but have not yet caused significant disruption. Export growth for the whole month of March was 4.0%.