Japan's biggest business lobby, Keidanren, plans to urge major corporations to consider wage increases with "enthusiasm and determination stronger than this year," a draft guideline for the annual wage negotiations showed Monday, signaling its intention to seek pay hikes of over 4 percent.

The average pay hike at major member firms this year stood at 3.99 percent, the highest in 31 years. The draft guideline did not include any numerical goals for the increase but defined 2024 as "an extremely important year to attain sustainable wage growth."

Speaking at a meeting on Monday that was also attended by Masakazu Tokura, head of the Japan Business Federation, Prime Minister Fumio Kishida reiterated his resolve to "spearhead" the government's efforts to encourage the business sector to raise wages during next year's "shunto" spring negotiations.

As Russia's war on Ukraine and the weak yen are pushing up the cost of everything from gasoline to food, momentum toward hiking wages is finally growing in Japan, where consumers have become accustomed to a long period of deflation.

During a press conference in September, Tokura expressed expectations of seeing pay hikes exceeding 4 percent next year.

Kishida is considering holding a meeting, possibly later this month, for discussions between the government, the business community and labor unions, according to a government source.

In the meeting, Kishida is expected to demand wage increases that match the rise in prices, the source said. Kishida held a similar gathering in March for this year's wage negotiations, marking the first time in eight years.

Rengo, Japan's largest labor organization, said in October it would demand a pay hike of at least 5 percent next year, a stronger expression than the "around 5 percent" target it aimed for this year.

According to the Keidanren draft guideline, pay-scale increases should be considered "an important option" in addition to regular pay raises at a time of rising prices, and contributing to structural wage hikes is the responsibility of companies and Keidanren.

The business lobby is also expected to call on the government and the Bank of Japan to steer monetary policy toward realizing an appropriate level of inflation.

The guideline also said wage hikes at small and medium-sized businesses, which employ nearly 70 percent of workers in Japan, are essential to build momentum toward increasing pay across the country.

Related coverage:

FOCUS: "Tax hike glasses" Kishida struggling to sell his government's story

Japan OKs over 17 tril. yen economic package to ease inflation shock

FOCUS: Long unwinding road awaits BOJ after slackening reins on yields