Abenomics Agony: Japanese Base Wages Tumble By Most In 2014 (22nd Consecutive Monthly Drop)

Tyler Durden's picture

As we noted previously, for the past year Abenomics has had the "get out of a jail free" card because while the plunging yen was crushing Japanese purchasing power, and sending nominal regular wages ever lower, at least the stock market was higher - so (some of the) locals could delude themselves they are getting richer, if only on paper. However, following the most recent 15% correction in the Nikkei which may soon become an all out rout if the 102 level in the USDJPY is ever "allowed" to break, all Japan suddenly has left, is the shock of soaring food and energy prices, and the hangover of declining wages that refuse to stop dropping. Case in point, tonight the Japan labor ministry reported that monthly wages excluding overtime and bonus payments fell 0.4 percent in March from a year earlier (the biggest drop in 2014), a series of declines which has now stretched to 22 consecutive months.



How unpatriotic of Japanese firms not to do as they are told and raise base wages!! Despite rising costs and slowing demand...

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AdvancingTime's picture

When the yen drops faster than the Japaneses stock market rises it will no longer protect the wealth of those invested within its borders. Japan is the most indebted developed country in the world and its future prospects are dim and getting worse. It is only a matter of time before the yen becomes worthless and as inflation begins to take root it will place upward pressure on Japanese bond yields and raise the cost of government to service its massive debt.

With the BOJ  set to absorb half of the government bonds planned for sale this fiscal year, domestic investors have already started venturing overseas for higher yielding assets. If this turns in to a tsunami of  money fleeing Japan it will constitute the end of the line for those holding both JGBs and the yen. More on this subject below,


TheRideNeverEnds's picture

Hey man, that money has to go somewhere, the S&P is somewhere; you know what this means right?




E-minis to the mooooooon!!!1


PS: they are down three solid points in the after-hours right now, grossly oversold. BTFD!

zuuma's picture

This would be a good time to re-read some doomer stories from the early '80s about how Japan, Inc was gonna utterly surpass & take over the USA.

(with close competition from West Germany)

-STYX sang: " domo arigato, mr. roboto" about our new Japan masters.

-Some dude in Detroit saw a Chinese man and beat him to death - thinking he was Japanese.

-All the angst because Japanese were buying all the property for sale in the USA. Their owned acerage totaled than the size of Iowa at one point.

-raffles for $5 a swing to hit Japanese cars with sledgehammers at county fairs.

Much weeping & gnashing of teeth, there was.

And now?

Down the memory hole.



transaccountin's picture

people must be using magic money plants in their house to pay for the ever increaseing trinkets.

Caviar Emptor's picture

Biflation bytes! This is where it is headed for USA and most developed economies. Higher prices, lower incomes: Japan was always one step ahead since the crash began in 1990

suteibu's picture

As much as 15 trillion (USD) in savings goes a long way.  Hope springs eternal in the land of cultural obedience to authority.

Kobe Beef's picture

Most aren't buying. Some use credit. The rest buy their household necessities at the 108¥ Store. People still spend on their kids, if they have any.

Japan is toast. All they've got left is debt, denial, and dimwits on crackphones. The End is Near.

Slave's picture

What a bunch of assholes!!!!

max2205's picture

Ue li tu me longtime

Dr. Engali's picture

All western economies are dead men walking. Labor will continue it's downward spiral and the central planners will continue to prop up a failed system in order to protect the status quo. The serfs will dine on radio active shellfish and mealworms while the elites have the finest foods catered in from around the globe. Globalization bitchez! It's that great sucking sound of wealth transferring from west to east.

disabledvet's picture

Just bow a little lower.

It's all good.

Oldwood's picture

We haven't much of Kyle Bass here lately. probably getting his vaults prepped.

shinobi-7's picture

Deflation in Japan is speeding up not slowing down. As the chart above shows, the Japanese have lost about 20% of their purchasing power over the last 5 years. (A little less in fact thanks to deflation.) The effect of the increased VAT will be more deflation as we already can see in the stores. People who raise their prices are guaranteed to sell nothing since the consumers have less disposable income available and so their all end up doing the right thing willingly or not: Lower their prices and their margins.

Caviar Emptor's picture

Yes. Biflationary economics 101: aggressive monetary policy and anti-competitive practices encouraged by central banks, politicians and the super-duper-wealthy simply raises the prices for necessities, raises the barriers for entry of competitors into markets. Meanwhile real median incomes spiral ever lower as does aggregate demand for high end and finished goods. End point is banana republic status with 99% on subsistence and .1% xcontrolling everything including secret police

WhiteWolf's picture

I saw Kyle in kiev horrifying around in a turbo APC with twin front mounted .50 caliber machine guns and several RPG's rear mounted. He was doing doughnuts amongst the Russian and Ukrainian tanks throwing his nickels to the citizens while broadcasting Bob Dylan's knocking on Heavens door. 

WhiteWolf's picture


TruthInSunshine's picture

That's odd; I saw Krugman with a Chinese menu in his hand

Walking through the streets of Soho in the rain

He was looking for the place called Ho Lee Fook's

Going to get a big dish of hedonically adjusted transglutaminase treated pink slime chow mein

yellowsub's picture

Raise their minimum wage, problem solved!

Magooo's picture

Inflation + Falling Wages = Kyle Bass should cash in big time


BUT - when Japan goes everything goes - and nobody cashes in - the only joy they will get is being able to say I told you so

buzzsaw99's picture

between competition from chinese slave labor and executive bonuses even with the currency debauchery there just isn't enough to go around.

rkbauer's picture

Now on top of all of this, Japanese year-on year exports are plumetting.


Yep, good job Abe. 

e-recep's picture

Debasing the currency no longer boosts exports by reducing domestic costs. All measures are exhausted. Japan is toast.

CHX's picture

Japan - and by extension the Western financial world - is experiencing a slowly creeping up and the suddenly very real final-thoughts -"oh crap" moment. Mr. Minski