Toyota and Honda, two of the biggest names in the Japanese auto industry, claim to have agreed to give their employees in that nation the largest pay increases in decades.
They are the most recent businesses in the third-largest economy in the world to raise wages as costs rise.
According to official data released last month, Japan's inflation rate reached its highest point in more than 40 years.
As a result, businesses and government agencies are under pressure to assist people as their purchasing power declines.
Every year, Japanese companies typically hold lengthy pay negotiations with unions before making their decisions public around the middle of March.
The reason this year's announcements were made earlier than usual has not been disclosed by the automakers.
Toyota announced on Wednesday that it would comply with union demands for pay and bonuses, with the biggest wage increases in 20 years.
Koji Sato, the new 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. ".
The BBC contacted the company, but they declined to give more information.
Honda, a competitor in the auto industry, told the BBC that it had "fully responded" to union requests for pay raises and bonuses.
The company announced that it would increase base pay the most in three decades.
According to a Honda spokesperson, younger employees will receive the majority of the additional funds as starting salaries are raised.
"Management has a strong desire to create an environment in which all employees can, despite the challenging business environment. the need to move quickly with their work, the spokesperson added.
Fumio Kishida, the prime minister of Japan, urged businesses to raise wages earlier this year to assist people who are struggling with rising prices.
Fast Retailing, the company that owns the Uniqlo clothing chain, announced in January that it would increase employee pay in its home country by up to 40%.
Beginning in March, the company said the new pay policy would be in effect for all full-time employees at its headquarters and company stores in Japan.
Prices and wage growth in Japan had been flat for decades.
The world's inflation rate increased recently as nations relaxed pandemic quarantines and the conflict in Ukraine drove up energy costs.
Core consumer prices in Japan increased by 4% in December compared to the same month a year earlier, which is twice the central bank's target level and the highest rate in 41 years.
