TOKYO Japan's largest labour organisation Rengo is planning to ask for a total pay hike of more than 5%, including a 3% increase in base salaries, at negotiations in spring next year, public broadcaster NHK reported on Tuesday, citing unnamed official.

Japanese wages had remained stagnant for decades until last year, when rising raw material costs pushed up inflation and piled pressure on firms to compensate employees with higher pay.

Major companies agreed to average pay hikes of 3.58% this year, the highest increase in three decades.

Rengo will kick off debates this month on pay rises for the coming year and set its expected wage demand by year end, before it negotiates with management early next year so that major firms can offer pay rises around the middle of March.

Prime Minister Fumio Kishida has emphasised the need to achieve sustained, broader wage increases to cushion the blow to households from rising living costs and to enable Japan to decisively break free of deflation, which has hobbled economic growth for decades.

Bank of Japan Governor Kazuo Ueda has also repeatedly stressed the need to keep monetary policy super-loose until wages increase enough to keep price growth sustainably around 2%.

(Reporting by Satoshi Sugiyama; Editing by Jacqueline Wong & Simon Cameron-Moore)