Japan's top firms to raise pay, benefits seen blunted by sales tax

Toyota workers checking paints and bodies of Toyota Motor's best-selling car, Corolla, at Toyota Motor East Japan's Ohira at Ohira village in Miyagi prefecture, northern Japan in 2012. Toyota, Hitachi Ltd and Panasonic Corp will be among the companies offering generous payrise to workers following soaring profits in 2013 following the weak yen, loose monetary policy and pressure from the government - AFP Photo.

TOKYO: Big Japanese companies such as Toyota Motor Corp will offer the most generous pay raises in years on Wednesday, but workers will still struggle to offset a sales tax increase, highlighting the difficulties the government is facing in overcoming entrenched deflation.

Toyota, Hitachi Ltd and Panasonic Corp will be among the firms announcing their responses to union pay demands after a year of soaring profits, thanks to the weak yen and massive stimulus policies of Prime Minister Shinzo Abe.