The head of Rengo, Japan's largest trade union confederation, pledged on Friday to seek higher wages for workers in coming years to sustain a wave of pay hikes that kicked in this year.

"Wage hikes must not end in 2024 but continue in 2025, 2026 and more," Rengo President Tomoko Yoshino said. "It's vital to bring the level of wages on par with the global standard."

Rengo said last month it will demand wage hikes totaling 5% or more next year.

Major Japanese firms — under pressure to retain workers amid a labor crunch and compensate workers facing rising costs of living — offered the biggest pay hikes in 30 years this year.

However, she said Rengo also faces other urgent issues that must be resolved such as unfair trade practices and the problems of small firms that are unable to pass on rising costs to bigger clients in supply chains, as well as the pay disparity between men and women.

"Labor, management and government — all of us recognize the importance of not just one-off but sustainable wage hikes," she said, underscoring the need to support small and midsized firms in rural areas and part-time workers, who are struggling to make ends meet.

"We are on the same page. What's important is for all of us to head towards the right direction. Sharing the objective to exit the current plight is also important."

The Bank of Japan has said sustained, broad-based wage increases are crucial to durably achieve its 2% inflation target, and allow it to exit years of ultraloose monetary policy. The key for policymakers is whether the pay trend continues next year and spreads to smaller firms across the country.