TOKYO, Jan. 16 (Xinhua) -- The Japan Business Federation (Keidanren) on Tuesday in its annual report on guideline for its member businesses urged they implement a 3 percent pay increase ahead of official wage negotiations in spring.

The powerful business lobby, in line with Japanese Prime Minister Shinzo Abe's ongoing calls for wages and salaries to be increased to stimulate consumption and beat deflation, is encouraging wage hikes through either regular scaled increases or bonuses and other incentives.

Private consumption accounts for 60 percent of Japan's Gross Domestic Product (GDP), but consumers and households, amid stagnant wages and concerns for Japan's economic outlook, despite a fairly solid track record recently, have continued to tighten their purse strings.

"We will contribute to Japan's full exit from deflation and further expansion of a virtuous cycle in the country's economy by making additional efforts to improve labor conditions," the business lobby said in its report.

The federation referred to the increase in wages as being a "social demand."

Keidanren is an economic organization with political and business ties at home and abroad and is comprised of around 1,350 representative companies of Japan, 109 nationwide industrial associations and 47 regional economic organizations.

The lobby's mission is to support corporate activities by drawing on the vitality of corporations, individuals and local communities.