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By Tetsushi Kajimoto and Kiyoshi Takenaka
TOKYO, March 15 (Reuters) - Top Japanese companies agreed to their largest pay increases in a quarter century at annual labour talks that wrapped up on Wednesday, heeding, at least for now, Prime Minister Fumio Kishida's call for higher wages to offset rising living costs.
Worker pay has been a casualty of years of sputtering growth in the world's third-largest economy. Japanese salaries are virtually unchanged since the late 1990s and now well behind the average for the OECD grouping of rich countries.
Kishida has stepped up his call for better pay as a weak yen currency and higher commodities prices have driven up import costs, sending inflation to its highest in four decades.
The average wage increase at "shunto" spring wage talks this year was the biggest in about 30 years, according to the Keidanren business lobby, which did not give a more exact figure. That put the increase broadly in line with analysts' expectations for a boost of almost 3%, which would be the biggest since 2.9% in 1997.
"This spring marks a turning point for growth and wealth distribution," Kishida told a meeting with representatives of business lobbies and unions, adding that he aimed for a nationwide increase in the minimum wage.
A number of Japan's biggest corporations - including Toyota Motor Corp and Hitachi Ltd - said they had agreed to the requested increases from unions, results that were widely flagged in recent weeks.
"Given the surge in prices, employee expectations were running higher than most years," Hitachi Vice President Kenichi Tanaka told a briefing.
The Rengo labour confederation had called for a 5% pay hike.
This year's talks marked the first time that all of Japan's major automakers had fully accepted union demands, Akihiro Kaneko, the president of an umbrella group of automaker unions, said.
'I'M SO JEALOUS'
But for workers at smaller companies - which make up almost 70% of Japan's workforce - the outlook was less rosy. Those businesses have often struggled to pass on rising costs to their customers.
"I'm so jealous of workers at companies like Toyota," said Takehiro Kato, who works at a truck maker where wages have hardly risen. His employer recently paid out a one-time allowance to help counter inflation, but that's it.
"You can't count on money like that, because you don't know when you'll get another such payment again," Kato said.
It's unclear whether the rising wage trend will be sustainable, let alone create the "virtuous cycle" of stronger economic growth and 2% inflation long sought by Japan's central bank.