Japan real wages up 1.9% in February, most in five years and boosting case for rate hike

TOKYO, April 8 (Reuters) - Japan's real wages rose 1.9% in February, the most in five years and a second straight month of gains, government data showed on Wednesday, bolstering the case for the Bank of Japan to lift interest rates at its meeting this month.

• The data highlights solid growth in Japan wages even before last month's spring wage negotiations resulted in hikes of above 5% for a third consecutive year.

• The Bank of Japan, which next reviews rates April 27-28, considers steady rises in wages and prices as a prerequisite for another hike. Most participants have now priced in another hike this month.

• Inflation-adjusted wages, a crucial determinant of household purchasing power, accelerated from a revised 0.7% gain in January that had marked the first real pay growth in 13 months.

• The 1.9% gain was the most since a 3.1% rise in May 2021.

• Average nominal wages, or total cash earnings, rose 3.3% to 298,341 yen ($1,867), after a revised 2.5% gain for January. It was the strongest pace in seven months.

• The growth in nominal pay exceeded the consumer inflation rate the ministry uses to calculate real wages, which was 1.4% in February, the slowest gain in four years. Consumer inflation in Japan has been easing in recent months as government subsidies offset rising import costs from a weak yen, as well as surging oil prices due to the Iran war.

• Workers' base salaries, or regular pay, grew 3.3% in February, the biggest jump in nearly 34 years. Base salary growth for full-time workers was 3.7%, the highest since the ministry introduced the metric in 1994.

• Overtime pay also rose 3.3%. Special payments, consisting mostly of one-time bonus payments, were up 7.1% after a revised 8.6% fall for January.

• ($1 = 159.8100 yen)