• Kyodo

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Keidanren, Japan’s most powerful business lobby, has renewed its call on member companies to implement a 3 percent pay hike ahead of annual labor-management wage talks, saying the increase is needed in response to “social demands.”

Following Prime Minister Shinzo Abe’s repeated calls for pay hikes to spur consumption and beat deflation, Keidanren, also known as the Japan Business Federation, has sought wage increases either through pay-scale hikes or by boosting bonuses and allowances.

Keidanren made the call in an annual report Tuesday which will serve as a guideline for businesses in the 2018 spring wage negotiations for the fiscal year starting in April.

“We will contribute to (Japan’s) full exit from deflation and further expansion of a virtuous cycle in the country’s economy by making additional efforts to improve labor conditions,” the report said.

The Abe administration has requested pay increases for the fifth straight year in a bid to stimulate private consumption, a key driver of the Japanese economy.

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