May regular pay growth fastest in 28 years
Spring labour talks 2023 yielded average 3.58 pay hikes Rengo
Real wages 1.2, 14th month of decrease on inflation
April household spending 4.0 yy, 1.1 mm

TOKYO, July 7 Reuters Japan39;s nominal base salary grew at the fastest pace in 28 years in May, government data showed on Friday, adding fuel to the debate over when the central bank will unwind its ultraloose monetary stimulus.

Global financial markets have been closely watching Japan39;s wage data, as Bank of Japan Governor Kazuo Ueda regards pay growth as a key gauge to consider in deliberations about a shift in policy.

Regular wages rose 1.8 in May from a year before, labour ministry data showed, the biggest gain since February 1995. The strong base pay growth boosted worker39;s total cash earnings, or nominal wages, by 2.5 in May, after a revised 0.8 increase logged in April.

If inflation stabilises around 2 and nominal wages accelerate to 3 to 3.5, the condition could be set for the BOJ to dismantle monetary easing framework from the Kuroda era, said Hisashi Yamada, economist and Hosei University professor.

Japan39;s largest labour organisation Rengo said on Wednesday that major companies had agreed to average pay hikes of 3.58 this year, the highest since 3.9 in 1993.

The result of the spring labour talks, known as shunto, will be increasingly seen in government wage statistics over the next few months, a labour ministry official said.

Still, real wages…