TOKYO (Kyodo) -- Many major Japanese companies, including Toyota Motor Corp., on Wednesday fully met the wage hike demands of their labor unions, which have been calling for substantial raises to address surging prices amid chronic labor shortages.

The government has been paying attention to the annual wage negotiations between management and labor unions to see if the strong push for salary gains will be sustained and extend to small and medium-sized companies, which employ around 70 percent of the country's workforce.

Seen as a trendsetter in wage negotiations, Toyota, the world's largest carmaker by volume, fully met its union's request on a total resource basis. The firm's union demanded wage hikes of up to 24,450 yen ($165) per month, depending on the worker.

Wage hikes remained subdued in Japan for decades following the burst of the asset-inflated bubble economy in the early 1990s and ensuing deflation.

But due in part to inflation caused by Russia's invasion of Ukraine, the "shunto" spring wage talks in 2023 saw the highest pay increase in 30 years.

Nevertheless, the pace of pay growth has yet to keep up with persistent inflation, with real wages falling year-on-year for the third consecutive year in 2024.

Market players are also closely monitoring the wage talks, with expectations of robust rises fueling growing speculation that the Bank of Japan will further raise interest rates.

Mitsubishi Chemical Holdings Corp. offered more than demanded, with a base pay hike of around 18,000 yen.

Among electronics makers, Hitachi Ltd. and NEC Corp. each proposed a monthly base wage increase of 17,000 yen, as sought by their unions.

Major heavy machinery manufacturers Mitsubishi Heavy Industries Ltd., Kawasaki Heavy Industries Ltd. and IHI Corp. followed suit in matching their unions' demands.

Bucking the upbeat trend, struggling automaker Nissan Motor Co. proposed an average wage hike of 16,500 yen, lower than the 18,000 yen sought by its union. Honda Motor Co. also failed to meet its union's demand.

The strong results reflected Japan's severe labor crunch, which prompted companies to raise salaries to retain workers and attract talent.

The annual wage talks at major companies typically begin in mid-February and conclude by mid-March. But this year, several firms, including auto parts makers Denso Corp. and Aisin Corp., had already fully met their labor unions' requests before Wednesday.

A preliminary tally by the Japanese Trade Union Confederation, the country's biggest labor union umbrella organization, known as Rengo, as of March 3 showed that its member unions had demanded an average pay rise of 6.09 percent, exceeding 6 percent for the first time since 1993.

Many major firms have the resources to boost wages, supported by anticipated strong earnings for the current fiscal year through March.

The combined net profit of major companies is expected to reach 52.65 trillion yen for fiscal 2024, marking a record for the fourth straight year, according to data from SMBC Nikko Securities Inc.