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Low wage growth stifles Japan's long fight against deflation

Pay increases trail productivity, putting any declaration of victory on back burner

Representatives of Toyota Motor's labor unions pushed for higher pay in Toyota, Aichi Prefecture, in March. Japan's wages have not kept track with its growing productivity.   © Kyodo

TOKYO -- Meager growth in pay for Japan's workers sank a crucial yardstick for the fight against deflation into negative territory during the October-December period, dampening some long-awaited optimism achieved in the previous three months.

In the last three months of 2017, the nation's unit labor costs -- nominal wages divided by gross domestic product -- shrank year over year for the first time in nine quarters as a result of sluggish growth in pay compared to GDP.

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