Real wages in Japan projected to stay flat through 2026 says NHK
- Adam German
- 1 day ago
- 2 min read
On December 5, NHK World Japan reported that analysts are predicting 2026 real wages are unlikely to rise much.
Reporter Yuko Fukushima spoke with Kumano Hideo, Executive Chief at Dai-ichi Life Research Institute in the segment below.
NHK World does not allow their YouTube videos to be embedded on third party sites, so click here or the above screengrab to watch the segment on YouTube.
Key Topics Covered
Household spending in Japan fell 3% in October as consumers cut back on essentials, especially food, due to prices rising faster than wages.
Real wages have declined throughout 2025 because inflation has consistently outpaced pay gains.
Compared with the United States, Japan’s real wage performance lags sharply. In the US, strong wage growth is driven by high-value, high-productivity service industries.
Japan’s service prices rise slowly while goods prices climb quickly, creating downward pressure on real wages.
Japan lacks a large, high-productivity tech sector like the US “Magnificent Seven,” limiting wage-driving industries.
Key domestic sectors such as medical care, nursing, and social services remain low-paid, and government-regulated pricing prevents firms from charging more for higher-quality services.
Two major external pressures may limit wage growth in 2026 - US tariffs introduced during the Trump administration, costing major Japanese automakers about ¥3 trillion yearly that could have gone toward higher wages. Political tensions with China, risking a sharp drop in inbound tourism from mainland China and Hong Kong, which together account for one-third of tourism demand.
Inflation is expected to fall to around 2% in 2026, with nominal wage growth also near 2%, implying real wage growth of roughly zero.
Economists say meaningful wage gains depend on small and medium-sized firms expanding overseas to take advantage of the weak yen and boosting export competitiveness.
Without shifts in business models and value creation, substantial real wage improvement may take longer than one year to materialize.
