Uniqlo operator Fast Retailing has decided to increase wages as much as 40 percent from March amid increases in living costs.

The casual clothing chain operator says the change will affect about 8,400 employees in Japan. The goal is to match domestic pay with overseas to draw good employees.

The starting monthly salary for fresh recruits will be raised by 18 percent to 300,000 yen, or about 2,260 dollars.

The monthly salary for a new store manager will be raised 36 percent to 390,000 yen or about 2,940 dollars.

Allowances based on position in the company and location of work will be abolished under the pay increase plan.

Pay in Japan is lower on average than most other developed economies. Employees and the government have strongly urged companies to raise wages.