Japan's monthly average real, or inflation-adjusted, wages fell 2.2 percent in the last fiscal year to March, declining for the second straight year as inflation outpaced wage growth, the government said Thursday.

The decline follows a 1.8 percent decrease in fiscal 2022 and marks the largest drop since fiscal 2014 when real wages fell by 2.9 percent due to a consumption tax hike, according to the revised data released by the Ministry of Health, Labor and Welfare.

Real wage growth has not kept up with rising prices caused by higher raw material costs and a weak yen which lifted the value of imports, making everyday goods more expensive and reducing households' purchasing power.

The data came as many major Japanese firms agreed in spring wage negotiations to offer their highest monthly wage increases of over 5 percent, the largest raise in more than 30 years.

The government of Prime Minister Fumio Kishida has been pressuring companies to give pay hikes to bring a positive cycle of pay and price increases.

In nominal terms, the average monthly wage, including bonuses, increased 1.3 percent to 332,533 yen ($2,120) in the fiscal year ended March this year, rising for the third straight year.

However, the consumer price index, used to calculate real wages, rose 3.5 percent in the reporting year, outstripping the growth in nominal wages and resulting in the decline in real wages.

Base pay was up 1.3 percent at 253,534 yen and special pay including bonuses gained 1.6 percent to 59,925 yen in fiscal 2023. Unscheduled wages, including overtime pay, fell 0.3 percent to 19,074 yen.

Average monthly nominal wages for full-time workers grew 1.7 percent to 438,696 yen and those for part-time workers climbed 2.4 percent to 105,989 yen.

In March alone, inflation-adjusted wages fell 2.1 percent from a year earlier, marking the 24th straight month of decline, breaking the record of the longest consecutive streak of monthly falls, set around the time of the global financial crisis triggered by the collapse of Lehman Brothers.

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