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Economic and Labour Situation in Japan (August 2016)

National Average Minimum Wage Increased to 822 Yen for FY 2016

The national average hourly minimum wage for fiscal 2016 has been raised to 822 yen, up 24 yen (3.0%) over the previous fiscal year. The margin of increase is proposed on July 28 by the tripartite Central Minimum Wage Council (comprising public, labour, and management representatives). After the Central Minimum Wage Council indicated its guidelines, tripartite Regional Minimum Wage Councils discussed minimum wage levels in each prefecture. All of the prefectural councils submitted final reports by August, and the new levels will take effect by prefecture from October.

According to the guidelines, Tokyo has the highest minimum wage of 932 yen. Second comes Kanagawa with 930 yen. Four prefectures, including Okinawa and Tottori, have the lowest minimum wage of 714 yen. Rengo claime these four prefectures minimum wages are still more than 216 yen lower than Tokyo's.

Industrial Production
Industrial Production fluctuates indecisively, but shows signs of increase in part.
Industrial production in June increased by 1.9% over the previous month, registering a increase for the first time and down 1.9% year-on-year. The index in June was 96.5 (seasonally adjusted).
Industries that mainly contributed to the increase were as follows: (1) chemicals (excl. drugs), (2) Transport equipment, and (3) Fabricated metals, in that order.
According to the Survey of Production Forecast in Manufacturing, production was expected to increase by 2.4% in July and 2.3% in August.

Family Income and Expenditure Survey in June
(1) Expenditure for Two-or-More-Person Households
The average monthly consumption expenditure per two-or-more-person household in June was 261,452 yen, down 2.7% in nominal terms and 2.2% in real terms year-on-year.

(2) Income and Expenditure for Workers' Households
The average monthly income per household stood at 731,099 yen (include bonus payment), down 0.3% in nominal terms but 0.2% in real terms year-on-year. The average consumption expenditure was 276,602 yen, down 5.6% in nominal terms and 5.1% in real terms year-on-year.

Labour Force Survey Monthly Results
(1) Employment
The number of employed persons in June was 64.97 million, an increase of 720,000, or 1.1%, over the previous year.

(2) Unemployment
The number of unemployed persons in June was 2.1 million, a decrease of 140,000, or 6.3%, from the same month in the previous year. The seasonally adjusted unemployment rate in June was 3.1%, down 0.1 point from the previous month. The unemployment rate for men was declined 0.2 point to 3.2%, while that for women rised 0.1 point to 3.0%. The unemployment rate has reached its lowest level in the past 19 years.

(10,000 persons)
  June figures Change from previous year
Population aged 15 years or over 11,079 -2 0.0
Labour force 6,707 59 0.9
Employed persons 6,497 72 1.1
Employees 5,740 75 1.3
Unemployed persons 210 –14 –6.3
Not in labour force 4,366 –60 –1.4
Labour force participation rate (%) 60.5 0.5
Employment rate (%) 58.6 0.6
Unemployment rate, original series (%) 3.1 –0.3
  Current month Change from previous month
Unemployment rate, seasonally adjusted (%) 3.1 –0.1

(3) Job availability
Japan's job availability in June registered its best level in 24 years, with the ratio of job offers to jobseekers standing at 1.37, up 0.01 point over the previous month. This figure means that there were 137 jobs available for every 100 jobseekers. Japan has likely achieved full employment and faces a severe shortage of labour.

Consumer Prices
The consumer price index in June was 103.3 (2010 = 100), down 0.2 point from the previous month and down 0.4% from the same month of the previous year. The inflation rate remains far below the 2% target set by the Bank of Japan, which hopes to achieve that goal around the second half of the fiscal year starting April 2017.

June 2016
Index Monthly
change (%)
change (%)
All items 103.3 0.2 –0.4
All items, less fresh food 103.0 -0.1 –0.5
All items, less food (less alcoholic beverages) and energy 101.6 -0.2 0.4
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