The rate of increase for the year that started in April matches the government's target of around 3 percent.

The proposal by a subcommittee of the Central Minimum Wages Council, which advises the labor minister, will raise hourly minimum wages to 848 yen on national average if implemented.

The 25-yen hike is the same as in the previous year and is the largest ever.

Minimum wages are the lowest hourly amounts that companies have to pay to workers.

The sizable increase is expected to lead to pay hikes for non-regular workers, including part-timers, who account for some 40 percent of all workers in Japan.

Based on regional income and price data, the full council divided the country's 47 prefectures into four categories to make respective recommendations of minimum wage hikes.

For example, a 26-yen hike was recommended for Tokyo and Osaka, a 25-yen hike for Kyoto and Hiroshima, a 24-yen hike for Hokkaido and Fukuoka and a 22-yen hike for Aomori and Okinawa.

The council is scheduled to submit the recommendations to Health, Labor and Welfare Minister Yasuhisa Shiozaki on Thursday.

Based on the recommendations, the 47 prefectures will decide their respective minimum wages, which will start to come into force around October.

During discussions at the subcommittee, the labor side claimed that the current minimum wages of 714 yen in Miyazaki and Okinawa, which is the country's lowest, are too low. It demanded major hikes to realize hourly wages of at least 800 yen in all prefectures within the next three years, apparently having in mind the government's 3 pct target.

Meanwhile, the employer side was cautious about accepting the demand, laying emphasis on a 1.3 percent pay hike by small companies in 2017, which is used as a bellwether for setting minimum wages.

As 2017 pay hikes have turned out to be the largest in recent years, the management side had no choice but to agree on the record-high minimum wage hike recommendations.

If the recommendations are implemented, the minimum hourly wage in Tokyo will rise 26 yen to 958 yen, the highest among the 47 prefectures. The lowest minimum wage will be 736 yen in Miyazaki and Okinawa, up 22 yen. (Jiji Press)