In Japan, real wages fell for the sixth consecutive month in June, causing concerns about economic recovery.

(1) Data released by the Japanese government on Wednesday showed that due to the continued higher inflation rate compared to wage growth, real wages in Japan decreased for the sixth consecutive month in June, raising concerns about the consumption-driven recovery of the world's fourth-largest economy. Real wages adjusted for inflation in June decreased by 1.3% compared to the same period last year, with the revised figure for May showing a 2.6% decline. Real wages are a key determinant of household purchasing power. Although the decrease in real wages in June was the smallest since January, it highlights the broader pressures faced by consumption. (2) Japan's core inflation rate has exceeded the target level of the Bank of Japan, potentially giving the central bank room to raise interest rates. However, geopolitical tensions and factors such as tariffs are exacerbating economic risks. Consumer inflation used by the Japanese Ministry of Finance to calculate real wages rose by 3.8% year-on-year in June, the smallest increase in seven months. Officials from the Ministry of Health, Labour and Welfare stated that despite a 3% increase in special payments compared to the same period last year due to summer bonuses, it still could not keep up with the rising inflation. Overall cash income in June increased by 2.5% to 511,210 yen, a higher growth rate than the revised 1.4% in May and the largest increase in four months. Basic wages in June increased by 2.1%, while overtime wages rose by 0.9%. Wage trends remain crucial for sustaining consumption momentum and are also one of the key factors the Bank of Japan closely monitors to determine the timing of the next interest rate hike.