Japanese
wages unexpectedly logged their strongest increase since 1997, providing a
boost to the government's battle against deflation.
Labour
cash earnings rose by 2.6% in July compared to a year ago, beating forecasts of
a slowdown to 0.9%.
Special
payments, or summer bonuses, grew by an annual 7.1% in July from a revised 2%
gain in June.
However,
some economists warn that wage growth is set to slow in coming months.
"The
summer bonus season ends in August, and bonus payments are set to fall sharply.
As a result, the growth rate of overall earnings will mostly be driven by
changes in regular pay," Marcel Theliant from Capital Economics said.
"With
base pay expanding clearly less rapidly than bonuses, wage growth will likely
