Members of Japan's top business lobby say they'll be supporting wage hikes at upcoming labor talks.

Officials with Keidanren, or the Japan Business Federation, on Tuesday announced guidelines for management to follow at the annual negotiations, which start later this month.

The guidelines say firms with improved earnings should raise wages as appropriate. They say the increases should also apply to base pay. They describe the policy as part of a "new capitalism."

That expression has been used to describe the economic agenda pushed by Prime Minister Kishida Fumio. Kishida says it will help drive greater growth and wealth distribution.

He wants companies that are back on a pre-pandemic footing to raise wages by more than 3 percent.

Keidanren officials are leaving it up to firms to decide for themselves how much to increase pay. But they say it's important to be mindful of what the public expects.

The officials say it's important that smaller firms also reward their workers with bigger pay checks. They say larger businesses can help them do that by paying them fair prices.