TOKYO (Kyodo) -- Japan's biggest labor union decided Friday to demand pay hikes of 5 percent or more next spring, while setting a higher target for small- and medium-sized companies to help bridge the salary gap between firms of different size.

The organization's target, which matches that of this year's spring wage negotiations, aims to maintain the current momentum of wage growth amid rising prices driven by higher import costs, the Japanese Trade Union Confederation said.

The labor union, also known as Rengo, said it wants to realize a pay raise of 6 percent or more for smaller enterprises, as they tend to receive more modest wage hikes due to difficulties in passing on additional costs to their prices.

"We will ramp up efforts to ensure companies can appropriately pass on their increased costs so that we can achieve sustained wage growth and address the pay gap," Rengo said in a statement.

Its member unions secured an average 5.1 percent pay rise this year, marking the first time the figure has exceeded the 5 percent threshold in 33 years, as both management and labor agreed on the necessity to raise wages with prices soaring.

The average pay hike for smaller firms, meanwhile, stood at 4.45 percent in 2024. The annual wage talks begin around mid-February and generally conclude at most large companies by mid-March. The outcome typically influences negotiations at smaller firms.