Activity reports E-mail magazine

Economic and Labour Situation in Japan, September 2023


Prime Minister Declares Minimum Wage of “1,500 yen by mid-2030s”

Fumio Kishida, the Prime Minister of Japan, announced on July 31 at the “Council of New Form of Capitalism Realization” that he aims to raise the national average hourly minimum wage to 1,500 yen by the mid-2030s. He stated that “a stable increase in wages and minimum wages is necessary.” The minimum wage will rise to an average of 1,004 yen from October, but this level is still low compared to other developed countries. This was a focus for subsequent goal-setting, as it exceeds the previous government goal of 1,000 yen. The aim is to alleviate households suffering from high prices through sustained wage increases. If by “mid-2030s” we assume the year 2035, the annual increase rate will be 3.4%.

Japan’s Economy Grows Annualized 6.0% in Q2

According to the Cabinet Office, Japan’s economy grew a real 1.5% during the April–July period over the previous quarter, or at an annualized rate of 6.0%, on robust auto exports and a revival in inbound tourism. Real gross domestic product (GDP) expanded for the third consecutive quarter, marking the fastest growth since the October–December period in 2020.
Consumer spending dipped 0.5% as rising prices for everyday goods hit consumer spending and sales of durable goods declined, more than offsetting strong demand for services such as dining out and hotel stays.
Capital investment, another key cornerstone of domestic demand, grew 0.03%, rising for the second straight quarter, propelled by software-related investment, and public investment also rose 1.2% in real terms following increase of 1.7% in the previous quarter.
Exports rose 3.2% after the easing of supply disruptions boosted auto exports. A steady recovery in the number of foreign tourists to Japan continued to give the economy a boost, with their spending counted as exports in GDP. Imports, meanwhile, fell 4.3% amid decreased energy and COVID vaccine imports.
Nominal GDP grew 2.9% from the previous quarter, or 12.0% at an annualized rate.

Labour Force Survey Monthly Results¹

(1) Employment

The number of employed persons in July 2023 was 67.72 million, an increase of 170,000 over the same month the previous year, surpassing the pre-pandemic level for the same month in 2019. By gender, this included 37.13 million men, down 10,000, and 30.59 million women, up 180,000 from the previous year.

(2) Unemployment

The number of unemployed persons in July 2023 was 1.83 million, an increase of 70,000 from the same month in the previous year.
The seasonally adjusted unemployment rate in July was 2.7%, up 0.2 from the same month the previous year, declining for the first time in four months. The unemployment rate was 2.7% for men, down 0.1, and 2.6% for women, up 0.5, from the same month the previous year, as more women sought employment amid higher living costs.

Units: 10,000 persons



Change From

Previous Year

Population Aged Fifteen and Over 11,029 6 0.1
Labour Force 6,955 24 0.3
Employed Persons 6,772 17 0.3
Employees 6,085 33 0.5
Unemployed Persons 183 7 4.0
Not in Labour Force 4,065 -20 -0.5
Labour Force Participation Rate (%) 63.1 0.2
Employment Rate (%) 61.4 0.1
Unemployment Rate, Original Series (%) 2.6 0.1
  Current Month Change From

Previous Month

Unemployment Rate, Seasonally Adjusted (%) 2.7 0.2  


(3) Job Availability

Japan’s job availability in July stood at 1.29, down 0.01 from the previous month, falling for the third straight month, as more people looked for employment while job offers remained at roughly the same level. This ratio means there were 129 job openings for every 100 job seekers.
The ratio of regular employee job offers to applicants was 1.02, down 0.01 from the previous month.
The ratio of new job offers to applicants, a leading indicator for the labour market, was 2.27, down 0.05 from the previous month.

Industrial Production²

Industrial production fluctuates indecisively
Industrial output in July was down 2.0% from the previous month. While production and shipments decreased, inventory ratio and inventories increased.
The industries that mainly contributed to this decrease were as follows: (1) production machinery; (2) electric parts and devices; and (3) electrical machinery and information and communication electronics equipment, in that order.
According to the Survey of Production Forecasts in Manufacturing, production was expected to increase 2.6% in August and 2.4% in September.

July 2023                                                          2015 average = 100

  Seasonally Adjusted Index Original Index
  Index Change From Previous Month (%) Index Change From Previous Year (%)
Production 103.6 -2.0 105.2 -2.5
Shipments 102.8 -2.1 104.4 -2.0
Inventories 108.4 2.9 108.2 11.9
Inventory Ratio 104.9 -1.2 102.7 9.8


Family Income and Expenditure Survey³

(1) Expenditure of Households of Two Persons or More

Average monthly consumption expenditure of households of two or more persons in July was 281,736 yen, down 1.3% in nominal terms and down 5.0% in real terms from the previous year, declining for the fifth consecutive month. By component in real terms, spending on education fell 19.8% and housing fell 18.6%. Clothing and footwear rose 6.9%.

(2) Income and Expenditures for Workers’ Households

Average monthly income per household stood at 637,866 yen (including bonus payments), down 3.0% in nominal terms and down 6.6% in real terms from the previous year. The average level of consumption expenditure was 306,293 yen per month, down 3.6% in nominal terms and down 7.2% in real terms year-on-year.

Consumer Prices⁴

The consumer price index (CPI) in July was 105.7 (2020 = 100), up 3.3% over the previous year and up 0.4% over the previous month. Core inflation (CPI less food and energy) was up 4.3% over the previous year, marking the sixteenth straight month of increase. Energy prices dipped 8.7%, as electricity bills fell 16.6% due to the government’s subsidization of utility bills for consumers. Food prices (excluding volatile fresh items) rose 9.2%, the fastest pace in nearly 47 years. Egg prices surged 36.2% amid bird flu-related supply concerns.

July 2022

  Index Annual
Change (%)
Change (%)
(Seasonally Adjusted)
All Items 105.2 3.3 0.5
All Items, Less Fresh Food 105.4 3.1 0.4
All Items, Less Fresh Food and Energy 104.9 4.3 0.5


  1.  Source: Labour Force Survey Monthly Results (Statistics Bureau of Japan)   (
  2.  Source: Indices of Industrial Production (Ministry of Economy, Trade and Industry)   (
  3.  Source: Summary of the Latest Month on Family Income and Expenditure Survey (Statistics Bureau of Japan)   (
  4.  Source: Consumer Price Index (Statistics Bureau of Japan)