Japan will raise the minimum wage by 3 percent each year from next fiscal year as part of a package of policies aimed at strengthening consumer spending and stoking economic growth.

The government will also strengthen policies to get more women into the workforce and ease regulations to encourage corporate investment and breathe new life into an economy that has struggled with patchy domestic demand.

The policies are also a positive development for the Bank of Japan, because it could lead to move private consumption and make it easier to guide inflation to its 2 percent price target.

"We need to ensure continuous economic growth supported by rising wages and the minimum wage must be included in this process," Prime Minister Shinzo Abe said.

Raising wages is an urgent task for policymakers as Tokyo is keen to ramp up consumer spending, which is seen as crucial to boosting domestic demand and pulling the economy out of 15 years of deflation.

The economy has fallen into recession twice since Abe took office in late 2012, and his government is under pressure to show that it can improve the economy.

See more at:

Reuters