Uniqlo owner Fast Retailing will raise annual pay for full-time employees in Japan by as much as 40%, seeking to retain and motivate staff as the nation faces the fastest pace of inflation in decades.

The plan includes workers at headquarters as well as in stores, the retailer said in a statement Wednesday. The wage hikes will impact new hires, store managers and a broader swath of employees, the company said.

Asia’s largest retailer and purveyor of fast-fashion apparel joins other domestic businesses such as Nippon Life Insurance and Suntory Holdings that are raising wages as consumer prices in Tokyo outpaced forecasts to hit 4% for the first time since 1982. The average wage in Japan is the lowest level of the Group of Seven nations, and the world’s third-largest economy has stagnated for decades.

"Going forward, the new remuneration of each employee will be decided by globally aligned grade criteria” based on work performance and results, as well as ability to contribute to the business, Fast Retailing said.

Starting monthly salaries for university graduates will increase to ¥300,000 ($2,270) from ¥255,000, while salaries for new store managers will rise to ¥390,000 from ¥290,000, Fast Retailing said. For other employees, the company plans to increase annual salaries by as much as 40%, it added.

As a result of the revision, including last year’s hourly wage increase for part-time workers, total personnel costs in Japan are on track to climb by about 15% this year, an impact the company can absorb by improving productivity, Fast Retailing said.

The retailer’s move follows a raft of similar moves across corporate Japan. Nippon Life Insurance plans to increase salaries for sales representatives by about 7%, pushing up personnel costs by ¥100 million, while Suntory will raise wages roughly 6%, according to local reports. Brewers Asahi Group Holdings, Kirin Holdings and Sapporo Holdings are also considering increasing base salaries, local media have said.

The average annual wage in Japan was $39,700 in 2021, according to the Organisation for Economic Co-operation and Development. The average of the OECD countries was $51,600 and the United States had the highest level of $74,700, it said.

Rising consumer prices in Tokyo are seen as an indicator of the nationwide trend and also a factor that could further fuel speculation the Bank of Japan will adjust monetary policy to exit a long period of massive monetary easing. The central bank shocked markets around the world last month by announcing a wider 10-year bond yield target, adding to expectations that it will shift policy.