* Summer bonuses weak; bode ill for private consumption
* Overtime pay down 17.7 pct in year to June
* BOJ forecasts in doubt, exit talk on likely on hold -analyst (Recasts first paragraph)
By Leika Kihara
TOKYO, Aug 3 (Reuters) - Japanese wage earners' total cash earnings tumbled 7.1 percent in the year to June, the biggest annual drop on record, which could hurt consumer spending and add to deflationary pressure on the economy.
Weakening household demand for goods is playing an increasing part in pushing the world's No. 2 economy deeper into deflation, with core consumer prices falling a record 1.7 percent in the year to June.
The Bank of Japan is already forecasting two years of deflation, so price falls alone are unlikely to push it back into full-blown quantitative easing, which in Japan involved flooding the banking system with cash to meet a specific monetary target.
But weak wages, coupled with a rise in the jobless rate to a six-year high in June, may heighten uncertainty over the central bank's forecast for a gradual economic recovery towards early next year, and put on hold any exit from its unconventional monetary policy steps.
"This puts downside pressure on prices, and deflation will worsen for the next one year. There is no way the central bank can move in this situation," said Masamichi Adachi, senior economist at JPMorgan Securities in Tokyo.
"But as long as the economic outlook looks like it will gradually improve in the long term, then the BOJ may not ease policy any further."
The drop in total cash earnings in June -- the 13th straight month of falls -- was nearly three times as big as in May and the largest drop since comparable data became available in 1990, labour ministry data showed on Monday.
Special payments in June, predominantly summer bonuses, fell 14.5 percent from a year earlier, boding ill for private consumption, which makes up about 60 percent of Japan's gross domestic product.
Overtime pay, a barometer of strength in corporate activity, fell 17.7 percent in June from a year earlier, the 11th straight month of declines, the data showed.
Having just emerged from almost a decade of deflation after the collapse of a property bubble in the 1990s, Japan has been sideswiped by the global financial crisis that started in 2007 with a U.S. mortgage market meltdown.
Still, the economy is thought to be emerging from recession thanks to a pickup in exports and factory output, with modest growth of 0.4 percent expected in the April-June quarter after a record 3.8 percent decline in the previous quarter.
The BOJ last month decided to keep buying commercial paper and corporate bonds from banks and provide long-term loans to banks at 0.1 percent interest, extending until December the steps it introduced to deal with a crunch in credit markets. (Additional reporting by Stanley White; Editing by Hugh Lawson)