Japanese firms agree to 5.46% wage hike

Tokyo, Japan - Japanese companies have agreed to raise wages by more than 5% for a second year in a row this year, the country's largest union umbrella group said on Friday.

The 5.46% preliminary reading from Rengo, a 7 million member-strong group, reflects broad agreement between policymakers, employers and unions that increased pay is necessary for workers to cope with sharply higher prices for food and other household necessities.

That argument has been strengthened by record corporate profits on the back of a weak yen and the need to retain staff amid labour shortages.

The number compares with last year's preliminary reading of 5.28% which was then revised down over several stages to 5.1% although the final figure was still a 33-year high. Final tallies are usually lower than preliminary figures as most agreements between smaller companies and their unions are factored in later.

(Reporting by Makiko Yamazaki; Editing by Edwina Gibbs)