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Japanese wages fall 0.5% in December 2017

Japanese wages in December 2017 fell at their fastest pace in five months, complicating the central bank's aim of achieving 2% inflation.

Real wages, adjusted for inflation, fell 0.5% in December 2017 from the year-ago period, according to labor ministry data released Feb. 7. The figure followed a 0.1% annual increase in November 2017, and marked the largest decline since a 1.1% annual decrease in July 2017.

For 2017, real wages fell 0.2%, following a 0.7% increase in 2016.

With the fall in wages, the government will face difficulty in convincing companies to raise wages by 3% or more this year at annual wage negotiations with labor unions.

Japanese Prime Minister Shinzo Abe has been urging companies to implement a 3% wage hike. Japan's ruling coalition in December 2017 also approved a proposal to cut the corporate tax rate to about 20% from 30% for companies that raise spending on wages and investment.