Nomura Holdings, Inc. (NYSE:NMR) (TYO:8604) responded to the call of Japanese Prime Minister Shinzo Abe to help boost economic growth by raising the wages of its employees in Japan, according to a report from Bloomberg.

Nomura Holdings

Based on its statement today, the minimum wage of employees at its subsidiary, Nomura Securities Co will increase by 2% starting April. According to Nomura Holdings, Inc. (NYSE:NMR) (TYO:8604) the salary increase is primarily intended for younger employees who are expected to spend money and contribute to Japan’s economy.

Nomura to lead charge of country-wide increases

Nomura Holdings, Inc. (NYSE:NMR) (TYO:8604) is the largest brokerage firm in Japan. Its business unit in the country has 13,200 staffs. The brokerage firm said 4,000 of the total employees of Nomura Securities Co will receive an additional ¥5,000 to ¥10,000 ($50 to $100) per month, according to Nomura’s spokesperson Kenji Yamashita. He added that the salary increase will cost the brokerage firm $300 million in one year.

Bloomberg noted that the 2% wage increase implemented by Nomura Holdings, Inc. (NYSE:NMR) (TYO:8604) is similar to the target inflation rate of the Bank of Japan. In April, the central bank announced its policy to double the monetary base in two years to achieve its objective.

Data from the Labor Ministry in Japan indicated that the regular compensation excluding the overtime pay of workers in Japan declined by 0.6% in September compared with the salaries of employees in the same period a year ago. It is the 16th consecutive compensation decline recorded in the country.

Prime Minister Abe encouraged companies to increase the wages of their employees given the continued price increases, which reduces the spending power. In October, consumer prices excluding fresh foods climbed 0.9% compared to the same period last year. The inflation of consumer prices rose for the fifth consecutive period, based on data released by the Japanese government today.

Salary increases could be crucial for Japan’s economy

Last month, Prime Minister Abe stated his plans to improve employment and raise the salaries of workers to create a “virtuous circle” to bolster spending and investment. Government officials started meeting companies and union leaders in the country in September. The meetings were part of the government’s initiative to convince businesses to help boost incomes.

During an interview a month ago, Takeshi Niinami, chief executive officer of LAWSON, INC. (TYO:2651), the second largest convenience-store chain in Japan said the company aims to raise wages by 2% to 3%. According to him, increasing the salary is critical for Japan’s economy.