More than half of Japan's companies do not plan to raise base pay in annual wage talks in coming months, a setback for Prime Minister Shinzo Abe and Keidanren, who have called for wage rises of 3 percent to fuel an economic revival.
In a monthly Reuters Corporate Survey, just less than half said they would raise pay and most in this group said the increase would be similar to last year's level of about 2 percent.
Abe and Keidanren, the country's main business lobby, have sought a 3 percent wage rise to encourage consumption and inflation, key elements of the administration's bid to vanquish deflation. A rise in fourth-quarter GDP reported last week marked Japan's longest continuous economic expansion since the 1980s, but significant wage rises remain elusive even though the labor market is its tightest in about four decades.