Around a third of small to mid-sized Japanese firms intend to raise wages in the future amid repeated government calls for pay hikes to counter inflation, a recent survey showed.

Some 34 percent of respondents said they are willing to offer wage hikes, including companies that have already raised wages, according to the survey by Daido Life Insurance Co.

Commuters walk outside JR Tokyo Station on Jan. 20, 2023. (Kyodo)

Among these firms, 24.9 percent said they would increase pay by "less than 2 percent," while 27.8 percent said they would do so by "2 percent to less than 3 percent."

The survey was conducted both online and in person from Dec. 1 to 26 and garnered responses from top executives at 9,238 small and mid-sized firms across Japan.

Prime Minister Fumio Kishida has called for pay hikes that outpace the rate of inflation. Recent government data showed the nationwide core consumer price index, a key gauge of inflation, gained 4.0 percent in December from a year earlier, the highest pace since 1981.

Over 3 million small to mid-sized firms make up more than 99 percent of all businesses in Japan. Pay hikes at these companies are critical to helping prevent rising prices from slowing consumer spending.

But the survey also found that 32 percent of surveyed firms have no intention to offer pay raises, citing the unclear economic outlook and sluggish earnings. These firms include those that sought to do so but could not.

"For a small company like ours, wage increases are hard," the manager of a wholesaler was quoted as saying during the survey. "My salary hasn't changed for many years."

The survey also found that 21 percent of respondents viewed the business environment in 2022 as good, unchanged from the previous year.

However, the rate did not recover to levels marked during the pre-pandemic year of 2019.

Thirty-two percent of respondents regarded the 2022 business environment as bad, down 4 points from 2021.

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