Japanese Labor Cash Earnings in November broadly missed the mark early Wednesday, with nominal wages printing at 0.2% YoY versus the forecast of 1.5%. Markets expected nominal earnings to hold steady with October's print, and after adjusting for inflation, real wages have declined 3% YoY.

Overall Household Spending for the year ended November also fell further back from the previous period, declining 2.9% YoY in November versus October's YoY -2.5%.

Market Reaction

Early Wednesday market volumes remain thin, and the USD/JPY continues to trade tightly near 144.40.

About Labor Cash Earnings

This indicator, released by the Ministry of Health, Labor and Welfare, shows the average income, before taxes, per regular employee. It includes overtime pay and bonuses but it doesn't take into account earnings from holding financial assets nor capital gains. Higher income puts upward pressures on consumption, and is inflationary for the Japanese economy. Generally, a higher-than-expected reading is bullish for the Japanese Yen (JPY), while a below-the-market consensus result is bearish.

About Overall Household Spending

The Overall Household Spending released by the Ministry of Internal Affairs and Communications is an indicator that measures the total expenditure by households. The level of spending can be used as an indicator of consumer optimism. It is also considered as a measure of economic growth. A high reading is positive (or Bullish) for the JPY, while a low reading is negative (or bearish).