Big firms offered smaller pay increases at annual wage talks Wednesday as the economy sputters, tempering hopes that domestic consumption will offset external risks to growth.
Major firms are set to raise wages for a sixth straight year as Prime Minister Shinzo Abe kept up the pressure on businesses to boost pay in an effort to beat the deflation that has dogged Japan for nearly two decades.
But as economic growth slows, firms have grown wary about offering big pay increases because that commits them to higher fixed costs at a time of uncertainty when company profits are leveling off.