Japan Focus of the Week June Wage

Economics Research 31 July 2026 | 8:04PM JST

Japan Focus of the Week: June Wage

Focus Next Week Yuriko Tanaka | n We expect June nominal cash wage to rise +3.2% yoy (May: +3.3%). While basic Goldman Sachs Japan Co., Ltd. wage will likely sustain solid growth of 3% yoy, special wages including summer Tomohiro Ota bonus is expected to decelerate somewhat to +3.5% from +4.4% in June 2025. | Goldman Sachs Japan Co., Ltd.

Akira Otani This Week’s Main Research | Goldman Sachs Japan Co., Ltd. n At the post meeting press conference, the Bank of Japan (BOJ) Governor Ueda stated that with underlying inflation approaching 2%, the BOJ will place greater emphasis than before on upside risks to prices in its conduct of monetary policy. He added that the BOJ will examine upside risks to prices from the perspectives of the situation in the Middle East, the expansion of AI-related demand, and exchange rate fluctuations.

This Week’s Data and Events n The BOJ decided to maintain its policy interest rate at 1% (by a majority vote), at its Monetary Policy Meeting on July 30-31, as widely expected. n The July Tokyo new core CPI (excl. freshfood and energy) rose +0.1 pp from June to +2.0% yoy, in line with the market forecast. Price increases were notable in non-durable goods, while prices also rose in durable goods, which likely reflected soaring memory prices. We estimate the new core CPI inflation rate excluding various special factors was +2.5%, up +0.1 pp vs. June. n Industrial production rose by +1.3% mom in June (May: +0.1%), slightly beating the market forecast (+1.0%) and increasing for the third consecutive month. The Ministry of Economy, Trade and Industry’s (METI) bias-adjusted production outlook for July calls for a decline of -0.7% mom, but due to the impact of the Kumamoto earthquake, actual production may fall below this level. n June retail sales came in well below market forecasts at +0.5% yoy and -4.1% mom. Sales decreased mom across all retail categories. n The July Consumer Sentiment Index rose by +1.1 points from June, exceeding market expectations. The expected inflation rate one year ahead remained high at 4.55% in July, but slowing from its peak in March (4.85%). n From the BOJ’s funds demand/supply projection for August 3, we estimate that authorities conducted a yen-buying fx intervention on July 30, in the order of Y7-8 trillion. The intervention in May was Y11tn, conducted over several days.

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Goldman Sachs Japan Focus of the Week

Upcoming Economic Indicators and Events (August 3 - 7)

Upcoming Economic Indicators and Events JST Region Indicators and events GS Consensus Previous Aug. 3 9:30 JP S&P Global Japan Manufacturing PMI (Jul; Final) 54.7 10:45 CN RatingDog China Manufacturing PMI (Jul) 52.0 51.7 17:00 EU S&P Global Euro Area Manufacturing PMI (Jul; Final) 52.0 23:00 US ISM Maufacturing Index (Jul) 54.0 53.3 23:00 US Construction Spending (Jun) mom % +0.2% +0.1%

Aug. 4 JP 10-Year JGB Auction 23:00 US Core Factory Orders (Jul) mom % +1.9% 23:00 US JOLT (Jun) 7250k 7594k

Aug. 5 8:30 JP Monthly Labor Survey (Jun) Total cash wages yoy % +3.2% +3.4% +3.3% 9:30 JP S&P Global Japan Services PMI (Jul; Final) 51.9 10:45 CN RatingDog China Services PMI (Jul) 53.7 54.1 17:00 EU S&P Global Euro Area Servoces PMI (Jul; Final) 51.6 21:15 US ADP Employment (Jul) 75k 98k 23:00 US ISM Nonmanufacturing Index (Jul) 54.3 54.0

Aug. 6 JP 30-Year JGB Auction 21:30 US Initial Jobless Claims

Aug. 7 8:30 JP Household Survey (2 or more person households; Jun) Real consumption spending yoy % +0.2% +1.0% -0.4% TBD CN Trade Balance (Jul) USD +$113.4bn +$125.6bn Exports yoy % +23.7% +27.0% Imports yoy % +27.7% +36.0% 21:30 US Civilian Unemployment Rate (Jul) 4.2% 4.2% Nonfarm Payroll (Jul) 88k 57k Private Sector Payroll (Jul) 93k 49k Average Hourly Wage (Jul) mom % +0.3% +0.3% yoy % +3.5% +3.5%

Source: Goldman Sachs Global Investment Research, Bloomberg

n June Monthly Employment Report: We expect the June nominal cash wage to rise +3.2% yoy (May: +3.3%). Basic…