This year’s spring wage negotiations involving major Japanese firms have delivered robust pay increases, with the preliminary figure for the average hike standing at a 33-year high of 5.28%, according to Japan’s largest labor organization.

The data suggests that pay hike momentum is gaining further steam, backed by steady corporate earnings and labor shortages. Inflation is still relatively high, but strong wage growth is key if Japan is to remove itself from the deflationary situation it has long been mired in.

According to the Japanese Trade Union Confederation, known as Rengo, its affiliated labor unions sought an average 5.85% pay raise this year. Still, the 5.28% average hike that was achieved is considerably higher than last year’s preliminary figure.