The Japanese government on Monday announced that the average monthly salary in 2016 rose by 0.7 per cent over the previous year, the first annual increase of this type in five years.

The rise is mainly due to increases in the base salary approved during negotiations between the major companies and labour unions last year, as well as the slight fall in prices throughout the year (the CPI registered a decline of 0.3 per cent for the whole 2016), Efe news reported.

In nominal terms (not adjusted for price changes), the average salary in Japan, including overtime pay, increased by 0.5 per cent from 2015 to 315,372 Yen ($2,807) in 2016, according to the data published on Monday by the Ministry of Labour, Health and Welfare.

The current government led by Prime Minister Shinzo Abe has for years been trying to implement wage increases in order to create growth in corporate profits, wages and consumption that would put an end to the deflationary cycle that the third world economy has suffered with for almost two decades.

The data is based on a survey of more than 33,000 companies with more than five workers from different parts of the country.