Economic and Labor Situation in Japan, August 2025

Minimum Wage Guideline Set at 1,118 yen on Average Nationwide — Increase of 63 yen Brings All Prefectures Above 1,000 yen

A subcommittee of the Central Minimum Wage Council, an advisory body to the Minister of Health, Labour and Welfare, has agreed on a significant increase in the minimum wage guideline.

On August 4, it settled on setting the guideline for fiscal 2025 at 1,118 yen per hour on a national average basis. This marks an increase from the current 1,055 yen, a raise of 63 yen, constituting the 23nd consecutive annual increase. This increase surpasses the previous record for the largest raise ever, exceeding the 50-yen raise in fiscal 2024, emphasizing a response to rising prices. If implemented as per the guidelines, the minimum wage in all prefectures will exceed 1,000 yen.

Rengo (Japanese Trade Union Confederation), noting that the wage increase in this year’s spring labor offensive was 5.25%—exceeding 5% for the second consecutive year—and that prices continue to rise, has been calling strongly for a minimum wage hike surpassing last year’s increase, aiming to achieve at least 1,000 yen in all prefectures.

Minimum wages vary by prefecture, with final decisions made by regional minimum wage councils based on the guideline amount. The expected implementation is within October.

Labour Force Survey Monthly Results¹

(1) The number of employed persons in June 2025 was 68.73 million, an increase of 510,000 over the same month the previous year. By gender, this included 37.28 million men, down 20,000, and 31.45 million women, up 520,000 from the previous year.

(2) Unemployment

The number of unemployed persons in June 2025 was 1.76 million, down 50,000 from the same month in the previous year.

The seasonally adjusted unemployment rate in June was 2.5%, unchanged from the same month the previous year. The unemployment rate was 2.5% for men, down 0.1, and 2.4% for women, up 0.1 over the same month in the previous year.

Units: 10,000 persons

(3) Job Availability

Japan’s job availability in June stood at 1.22, down 0.02 points from the previous month, marking the second straight monthly decline, as companies became hesitant to hire workers amid rising costs. This ratio means there were 122 job openings for every 100 job seekers.

The ratio of regular employee job offers to applicants was 1.02, down 0.02 from the previous month.

The ratio of new job offers to applicants, a leading indicator for the labor market, was 2.18, up 0.04 over the previous month. The number of new job offers decreased 2.5% from the same month the previous year.

By industry, living-related and personal services and amusement services and wholesale and retail logging decreased 9.1% and 11.7%, respectively.

Information and communications and scientific research and professional and technical services increased 5.2% and 1.8%, respectively.

Industrial Production²

Industrial Production Fluctuates Indecisively

Industrial output in June increased 1.7% over the previous month, its first increase in three months, on strong orders for airplane engines and parts. Production and inventory ratio increased, while shipments and inventories decreased. The industries that mainly contributed to this increase were as follows: (1) production machinery; (2) electronic parts and devices; and (3) general-purpose and business oriented machinery, in that order.

According to the Survey of Production Forecasts in Manufacturing, production was expected to increase 1.8% in July and 0.8% in August respectively.

June  2025           2015 average = 100

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 June was 295,419 yen, up 5.2% in nominal terms and up 1.3% in real terms from the previous year.

(2) Income and Expenditures for Workers’ Households

Average monthly income per household stood at 976,263 yen (including bonus payments), up 2.0% in nominal terms and up 1.7% in real terms from the previous year. The average level of consumption expenditure was 323,202 yen per month, up 7.7% in nominal terms and up 3.8% in real terms year-on-year.

Consumer Prices⁴

The consumer price index (CPI) in June was 111.7 (2020 = 100), up 3.3% over the previous year and 0.1% over the previous month. Core inflation (CPI less food and energy) was up 3.4% over the previous year and up 0.4% over the previous month, driven by higher rice prices. The inflation rate has remained at or above the Bank of Japan’s 2% price stability target since June 2022.

Prices for rice, Japan’s staple food, still soared 99.2% over the previous year. As the government reinstated its subsidies to alleviate the burden of utility bills on households between January and June, energy prices were up 2.9% from a year earlier but down 2.1% from the previous month. Electricity prices rose 5.5% and prices for city gas grew 2.8%.

June 2025

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1.  Source: Labour Force Survey Monthly Results (Statistics Bureau of Japan)
   (https://www.stat.go.jp/english/data/roudou/results/month/index.html)
2. Source: Indices of Industrial Production (Ministry of Economy, Trade and Industry)
   (https://www.meti.go.jp/english/statistics/tyo/iip/index.html)
3. Source: Summary of the Latest Month on Family Income and Expenditure Survey (Statistics Bureau of Japan)
   (https://www.stat.go.jp/english/data/kakei/156.html)
4. Source: Consumer Price Index (Statistics Bureau of Japan)
   (https HYPERLINK “https://www.stat.go.jp/english/data/cpi/1581-z.html” HYPERLINK “https://www.stat.go.jp/english/data/cpi/1581-z.html” https://www.stat.go.jp/english/data/cpi/1581-z.html