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Japan's wages poised to grow again as pay hikes outpace inflation

Real salaries seen rising in fiscal 2nd half, but small businesses lag

Pay hikes in this spring's negotiations reached a 30-year high, but whether such gains will continue remains to be seen. (Photo by Toshiki Sasazu)

TOKYO -- Japan's real wage growth is expected to return to positive territory later this year as prices stabilize and the largest pay hikes in three decades boost consumer purchasing power.

The 1.8% decline last fiscal year, which ended in March, was the largest drop since fiscal 2014 as rising prices across much of Japan's economy outpaced nominal pay gains. Inflation-adjusted pay is expected to keep falling from year-earlier figures in the six months through September.

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