The two biggest names in the Japanese auto industry, Toyota and Honda, claim to have agreed to offer their employees the biggest pay increases in decades.
They are the newest businesses to raise wages in the third-largest economy in the world as prices rise.
Japan's inflation rate reached its highest level in more than 40 years, according to official figures released last month.
Due to people's declining purchasing power, this has put pressure on organizations and the government to assist people.
Every year, pay negotiations with unions last for weeks at Japanese companies before decisions are made public around the middle of March.
This year's announcements were made earlier than usual, but the automakers have not explained why.
Toyota announced on Wednesday that it would comply with union requests for pay and bonuses, with the highest wage increases in 20 years.
Koji Sato, who will be taking over as president of Toyota, expressed his hope that the decision would benefit the entire Japanese automotive sector and "lead to frank discussions between labour and management at each company. ".
When contacted by the BBC, the company declined to offer more information.
Honda, a rival automaker, told the BBC that it had "fully" complied with union requests for pay raises and bonuses.
According to the company, base salaries will increase by the most in three decades.
As starting salaries are raised, a Honda spokesperson stated that the additional funds will primarily go to younger employees.
"Despite the challenging business environment, management is determined to foster an atmosphere where all employees can succeed. a sense of urgency as they move forward with their work," the spokesperson added.
In order to assist people who are struggling with rising prices, Japan's prime minister Fumio Kishida urged businesses to raise wages earlier this year.
The owner of the Uniqlo clothing chain, Fast Retailing, announced in January that it would increase employee pay in its home country by up to 40%.
The business announced that beginning in March, the new pay policy would be in effect for all full-time workers at its Japan headquarters and company stores.
Japan had experienced decades of stagnant price and wage growth.
As nations relaxed pandemic restrictions and the conflict in Ukraine drove up energy prices, inflation has increased recently all over the world.
Core consumer prices in Japan increased by 4% in December compared to the same month a year earlier, which was the highest rate in 41 years and double the central bank's target level.
