As inflation rises in Japan, pay hikes are becoming a more pressing issue for the country's workforce and government officials, with the administration of Prime Minister Fumio Kishida and the nation's top trade union urging companies to raise salaries.

The Japanese Trade Union Confederation — better known as Rengo — on Thursday disclosed its policy for the spring shuntō wage negotiations, bumping the overall pay raise target to about 5%, the highest level in 28 years.

“We hope everyone understands that the target shows our determination to make sure salaries can absorb the impact of price increases,” Rengo chair Tomoko Yoshino told a news conference on Thursday.