Toyota Motor Corp's labor union said Wednesday it has demanded the same level of wage hike as last year's -- the highest increase in over two decades -- as Japan's annual wage negotiations entered full swing in the face of rising living costs.

Toyota's wage request has long served as a bellwether for the shunto spring talks between unions and management. The outcome will be closely watched by Prime Minister Shigeru Ishiba's government as it steps up calls on businesses to increase pay more sharply than price rises.

The Bank of Japan sees sustainable wage hikes as a prerequisite to lift its key policy rate for monetary normalization.

Toyota's union does not disclose specific amounts for its requests regarding monthly salary but said it is seeking annual bonuses equivalent to 7.6 months of pay, also the same as last year.

"We want to discuss how Toyota and the automotive industry as a whole can grow together with others and create the future together," Toyota said in a release after receiving the union's request.

Last year, Toyota's management offered a pay rise that fully met the union's demand, the largest hike since 1999. The monthly pay was raised by up to 28,440 yen.

Among other automakers, Nissan Motor Co's union called for an 18,000 yen increase in monthly pay, the same level as last year's, but it lowered its annual bonus demand to 5.2 months of monthly pay, down 0.6 month, due to poor business performances.

Honda Motor Co.'s union, meanwhile, demanded a 19,500 yen hike in monthly pay.

In other sectors, unions of major steel and heavy machinery manufacturers all demanded a monthly rise of 15,000 yen last Friday.

Japan's biggest union group Rengo, or the Japanese Trade Union Confederation, said earlier its members are targeting a pay increase of 5 percent or more in this year's wage talks.

According to Rengo, its tally of the results of pay negotiations from over 5,000 member unions last year showed Japanese companies agreed to raise wages by an average 5.10 percent, offering a more than 5 percent increase for the first time in 33 years.

Ishiba has called for companies to realize "significant salary hikes" at annual wage negotiations to increase disposable income amid inflation as the country faces rising prices due in part to higher import costs from the weaker yen.

The outcomes of the wage negotiations at most major Japanese companies are expected to be reported on March 12.