TOKYO: Japanese Prime Minister Fumio Kishida on Thursday set a target to raise the country’s average minimum wage by nearly 50% from current levels in about a decade from now, underscoring his focus on achieving a consumption-driven economic recovery.

Kishida said the government will aim to raise the average minimum wage to 1,500 yen ($10.29) per hour by the mid-2030s, from this year’s 1,004 yen.

With rising living expenses hurting households and Kishida’s approval ratings, the administration has ramped up efforts to nudge companies into boosting wages.

The wage outlook is also key to how soon the Bank of Japan phases out its ultra-loose monetary policy.

BOJ Governor Kazuo Ueda has stressed the bank’s resolve to maintain ultra-low interest rates until rising inflation is accompanied by strong, sustainable wage growth.

Minimum wages are set by the government, while in the annual round of spring wage negotiations, corporate management and labour unions negotiate directly over salaries.

($1 = 145.8400 yen)

Reuters