Japan’s wage squeeze undermines Takaichi’s ‘trickle down’ plans

South China Morning PostEN 1 min read 100% complete by Julian RyallFebruary 11, 2026 at 02:30 AM

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Japan's Prime Minister Sanae Takaichi faces challenges in delivering on promises to ease the cost-of-living crisis, as government data reveals a decline in inflation-adjusted wages. In 2025, real incomes shrank by 1.3 percent, marking a three-year slide, because rising prices outpaced pay increases. Average monthly earnings rose nominally by 2.3 percent to 355,919 yen (US$2,280), but inflation exceeded 3 percent, surpassing the Bank of Japan's 2 percent target for the fourth consecutive year. The most significant price increases were in food staples and everyday items, including a 60 percent surge in rice prices, impacting household purchasing power despite government efforts to cap energy costs.

Key Entities & Roles

Key Player Opposition Context

Lawson 30% Tokyo 40% Bank of Japan 60% Sanae Takaichi 80% Japan ×390%

Keywords

wage squeeze 90% inflation 80% cost-of-living crisis 70% real incomes 70% price increases 60% purchasing power 60% trickle-down economics 60% sanae takaichi 50% food prices 50% bank of japan 40%

Sentiment Analysis

Negative

Score: -0.40

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Source

South China Morning Post

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90%

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Japan

This article was automatically classified using rule-based analysis.

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wage squeeze inflation cost-of-living crisis real incomes price increases purchasing power trickle-down economics sanae takaichi food prices bank of japan

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