On Monday, Japanese Prime Minister Fumio Kishida pledged to shield the economy from growing global inflation by ensuring wage increases for employees, while also strengthening the country's defences as it deals with an aggressive China and unpredictable North Korea.

Kishida made the statements on the first day of parliament's extra session, which was called to discuss a supplementary budget to help the economy recover from the COVID-19 pandemic and subsequently tackle fiscal reform.

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Wage increases are critical to the premier's goal of combating deflation by reversing a pattern of sluggish wage growth and weak consumer spending, as well as encouraging Japanese companies to spend their record cash piles on raising wages and investing.

Kishida has been putting pressure on Japanese businesses since taking office in October, urging those whose earnings have rebounded to pre-pandemic levels to raise wages by 3% or more.

He added that the government will establish the groundwork to assist private-sector corporations in raising wages by strengthening taxation and providing large deductions for firms that raise pay.

"As fears rise that growing global inflation will have a ripple effect on Japan," Kishida said, "I will do all possible to realise wage hikes in order to protect the Japanese economy."