Japanese banking giants are raising starting salaries for new graduates by as much as 30% as competition for fresh talent intensifies and the cost of living soars.

Mizuho Financial Group and Daiwa Securities Group were the latest financial firms to announce higher pay for employees joining straight from university, company statements showed Wednesday.

Wage hikes by Japanese companies are in the spotlight this year as the possible exit of the central bank’s ultraeasy monetary policy hinges largely on sustained salary growth. Prime Minister Fumio Kishida has called on businesses to raise wages above the inflation rate, which is running at a four-decade high of 4.2%.

Mizuho, the nation’s third-largest bank, said it will boost monthly salaries for college graduates joining in April 2024 to ¥260,000 ($1,900) a month, up from ¥205,000 currently. For those who completed doctoral studies, starting salaries will jump 30% to ¥300,000. The new pay scale applies to units including its securities arm as well as its core commercial bank.

Daiwa said new graduates in its "expert course” for specialist positions will receive at least ¥450,000 per month from June, up from ¥400,000 currently. Regular staff will get ¥280,000, up from ¥265,000, Japan’s second-largest brokerage said.

Large Japanese companies traditionally recruit hundreds of university students before they complete their studies. Competition for workers is heating up as the labor market tightens, with the jobs-to-applicants ratio hovering at the highest in almost three years.

Sumitomo Mitsui Financial Group’s main banking unit has said it is raising starting salaries for new graduates joining this April by ¥50,000. Those with college degrees will be paid ¥255,000 and graduate-school degree holders will get ¥280,000.

MUFG Bank, a unit of Japan’s largest lender, has said it is considering similar levels of increases for those joining in 2024.