Toyota's labor union is set to demand its biggest annual bonus on record, worth 7.6 months of pay, in the ongoing 2024 annual wage talks, the Nikkei business daily reported without citing sources.

With Toyota saying it expects to post record consolidated operating profits worth ¥4.5 trillion ($30.45 billion) for the financial year to March 2024, the trade union is also likely to demand high levels of monthly pay hikes, the Nikkei reported. The previous high for a bonus demand was 7.2 months of pay.

Some other major firms have already announced their plans to raise wages even more than last year, when Japanese firms had offered the highest pay hikes in 30 years in an effort to address labor shortages and cost-of-living pressures.

The bonus payments demanded by the Toyota union for this year compared with last year's bonus worth 6.7 months of pay.

The union is likely to reach a formal decision by the end of February.

The country's spring wage talks, which conclude in mid-March, are seen by the Bank of Japan as crucial for achieving sustainable wage growth and inflation.

The BOJ has also emphasized that both conditions must be met to exit its decadelong monetary stimulus program and end years of negative interest rates.