Back number

Economic and Labour Situation in Japan (October 2016)

National Average Hourly Minimum Wage for FY 2016 Marks Sharpest Increase
The national average hourly minimum wage for fiscal 2016 will rise 25 yen (3.1%) over the previous fiscal year to 823 yen. This marks the sharpest increase in the minimum wage since Japan began evaluating it by the hour instead of as a daily wage in fiscal 2002.
The margin of increase is about the same as the level 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 the 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 1 to 20.
Tokyo has the highest minimum wage of 932 yen, an increase of 25 yen. Second comes Kanagawa with 930 yen. Two prefectures, Okinawa and Miyazaki, have the lowest minimum wage of 714 yen. Although these two prefectures raised the amount by 21 yen, their minimum wages are still more than 200 yen lower than Tokyo's.
The guidelines for fiscal 2016 prefectural minimum wages announced by the Central Minimum Wage Council on July 28 were a national average hike of 24 yen (3.0%) and regional increases of 25 yen for A rank, 24 yen for B rank, 22 yen for C rank, and 21 yen for D rank prefectures. In the end, six prefectures decided on increases above these guidelines.

Industrial Production
The industrial production preliminary report for August shows signs of an increase at a moderate pace. Production and inventories increased, while shipments and inventory ratio decreased.

2010 average=100
  Seasonally adjusted index Original index
  Index Change from previous month (%) Index Change from previous year (%)
Production 97.9 1.5 92.6 4.6
Shipments 94.6 -1.3 89.4 1.5
Inventories 111.3 0.1 114.8 -1.8
Inventory ratio 113.2 -3.5 124.4 -2.7

Industries that mainly contributed to the increase were as follows: (1) electronic parts and devices, (2) information and communication electronics equipment, and (3) chemicals (excl. drugs), in that order.

According to the Survey of Production Forecast in Manufacturing, production was expected to increase by 2.2% in September and by 1.2% in October.

Family Income and Expenditure Survey in August
(1) Expenditure for Two-or-More-Person Households

The average monthly consumption expenditure per two-or-more-person household in August was 276,338 yen, down 5.1% in nominal terms and 4.6% in real terms year-on-year.

(2) Income and Expenditure for Workers' Households
The average monthly income per household stood at 480,083 yen, up 1.0% in nominal terms and 1.5% in real terms year-on-year. The average consumption expenditure was 301,422 yen, down 5.0% in nominal terms and 4.5% in real terms year-on-year.

Labour Force Survey Monthly Results
(1) Employment

The number of employed persons in August was 64.65 million, an increase of 860,000, or 1.3%, over the same month in the previous year.

(2) Unemployment
The number of unemployed persons in August was 2.12 million, a decrease of 130,000, or 5.8%, from the same month in the previous year. The seasonally adjusted unemployment rate in August was 3.1%, up 0.1 point over the previous month. The unemployment rate for men was 3.4%, up 0.2 point over the previous month, while that for women was 2.7%, the same as the previous month.

(10,000 persons)
  August figures Change from previous year
Population aged 15 years or over 11,077 2 0.0
Labour force 6,677 74 1.1
Employed persons 6,465 86 1.3
Employees 5,722 83 1.5
Unemployed persons 212 -13 -5.8
Not in labour force 4,393 -69 -1.5
Labour force participation rate (%) 60.3 0.7 -
Employment rate (%) 58.4 0.8 -
Unemployment rate, original series (%) 3.2 -0.2 -
  Current month Change from previous month
Unemployment rate, seasonally adjusted (%) 3.1 0.1 -

(3) Job availability
Japan's job availability in August remained at the highest level since August 1991, with the ratio of job offers to jobseekers standing at 1.37, the same as 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 labour shortage.

Consumer Prices
The consumer price index in August was 99.7 (2010 = 100), the same level as the previous month and down 0.5% 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.

August 2016
Index Monthly
change (%)
change (%)
All items 99.7 0.0 -0.5
All items, less fresh food 99.6 0.0 -0.5
All items, less food (less alcoholic beverages) and energy 100.4 0.1 0.2
Copyright(C) JILAF All Rights Reserved.