Economic and Labor Situation in Japan, October 2025

Hourly Minimum Wage Exceeds 1,000 Yen in All Prefectures for the First Time

The Ministry of Health, Labour and Welfare has announced the revised minimum hourly wages for this fiscal year, as determined by each prefectural council. For the first time ever, the hourly wage will surpass 1,000 yen in all prefectures. The nationwide average will be raised by 66 yen (6.3%), the largest increase ever, from the current 1,055 yen to 1,121 yen. In 39 prefectures, the revised wages surpassed the reference amount set by the national Central Minimum Wage Council by 1 to 18 yen, reflecting concerns over outflows of workers.
Given present shortages of labor, it is only natural for workers to seek higher wages in neighboring prefectures. Viewing this as a dishonor, governors and local governments have pressured the minimum wage committees to approve higher rates. Meanwhile, local businesses, fearing bankruptcy, resisted by significantly delaying the effective dates. Although wage revisions usually take effect in October, some prefectures have postponed their implementation until next year.
The largest increase was in Kumamoto Prefecture, where wages rose by 82 yen, 18 yen above the national guideline—understandable given the prefecture’s boom in semiconductors. Neighboring Oita Prefecture, directly affected, saw an 81 yen increase. Both will implement the changes in January next year. Last year, Akita Prefecture set its minimum wage at 951 yen, the lowest in the country at more than 100 yen lower than the nationwide weighted average of 1,055 yen. To counter the outflow of workers caused by its “low wage” image, Akita proposed an unusually large increase of 80 yen this year, bringing the rate to 1,031 yen. However, the effective date has been extraordinarily delayed to March 31 next year.
After the revision, Tokyo will have the highest minimum wage at 1,226 yen, while Kochi, Miyazaki, and Okinawa will have the lowest at 1,023 yen each. The gap between the highest and lowest will be 203 yen, narrowing by 9 yen compared with the previous year.

Labour Force Survey Monthly Results¹

(1) The number of employed persons in August 2025 was 68.35 million, an increase of 200,000 over the same month the previous year. By gender, this included 36.99 million men, down 13,000, and 31.37 million women, up 330,000 from the previous year.

(2) Unemployment
The number of unemployed persons in August 2025 was 1.82 million, up 70,000 from the same month in the previous year.
The seasonally adjusted unemployment rate in August was 2.6%, up 0.3 points over the same month the previous year, marking the highest level in 13 months, as more workers left their jobs to seek improved conditions. The unemployment rate was 2.8% for men, up 0.3 points and 2.3% for women, and up 0.1 points over the same month in the previous year.

Units: 10,000 persons

(3) Job Availability
Japan’s job availability in August stood at 1.20, down 0.02 from the previous month, marking the fourth straight monthly decline, as companies became hesitant to hire workers amid rising costs. This ratio means there were 120 job openings for every 100 job seekers.
The ratio of regular employee job offers to applicants was 1.00, down 0.02 from the previous month.
The ratio of new job offers to applicants, a leading indicator for the labour market, was 2.15, down 0.02 from the previous month. The number of new jobs offers decreased 6.2% from the same month the previous year. By industry, living-related and personal services and amusement services and wholesale and retail trade decreased 16.1% and 12.7%, respectively.

Industrial Production²

Industrial Production Fluctuates Indecisively
Industrial output in August decreased 1.2% from the previous month, declining for the second consecutive month, weighed down by a lull in demand for personal computers. Production and inventories decreased, while shipments and inventory ratio increased. The industries that mainly contributed to this decrease were as follows: (1) electrical machinery and information and communication electronics equipment; (2) fabricated metals; and (3) inorganic and organic chemicals, in that order.
According to the Survey of Production Forecasts in Manufacturing, production was expected to increase 4.1% in September. and 1.2% in October.

August  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 August was 313,977 yen, up 5.5% in nominal terms and up 2.3% in real terms over the previous year, marking the fourth straight month of growth, as consumers spent more on cars and leisure activities.

(2) Income and Expenditures for Workers’ Households
Average monthly income per household stood at 608,578 yen, up 6.0% in nominal terms and down 2.8% in real terms from the previous year. The average level of consumption expenditure was 347,325 yen per month, up 9.0% in nominal terms and up 5.7% in real terms year-on-year.

Consumer Prices⁴

The consumer price index (CPI) in August was 112.1 (2020 = 100), up 2.7% over the previous year and 0.1% over the previous month as food costs remained high. Core inflation (CPI less food and energy) was up 3.3% over the previous year and up 0.3% 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 August 2022.
Food prices, excluding fresh items, climbed 8.0% in August, up from the 8.3% rise the previous month, driven by surging costs for items such as rice, chocolate, and chicken. Prices for rice, Japan’s staple food, still soared 68.8% over the previous year. As the government reinstated its subsidies to alleviate the burden of utility bills on households between January and August, energy prices were down 3.3% from a year earlier and down 3.6% from the previous month. Electricity prices were down 6.8% and prices for city gas down 5.1% from the previous month.

August 2025

<Y.A>

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“://www.stat.go.jp/english/data/cpi/1581-z.html)