TOKYO, Nov 29 (Reuters) - Japan's government on Wednesday announced guidelines aimed at encouraging smaller firms pass on rising labour costs on to their customers, as part of efforts to broaden wage hikes in the world's third-largest economy.
In a survey conducted by the Fair Trade Commission (FTC) from May on 110,000 service-oriented firms and released on Wednesday, many respondents said they had not raised prices.
The median ratio of pass-through stood at just 30% for labour costs, much lower than 80% for raw material costs and 50% for energy fees, the survey showed.
The guidelines, announced by the FTC and the Cabinet Secretariat, urge service suppliers and client firms to hold regular discussions on price hikes.
Prime Minister Fumio Kishida's administration has made sustained wage hikes a key policy priority as inflation outpaces wage increases, hurting consumption.
The Bank of Japan has also stressed the need for wages to rise sustainably, and for companies to be able to pass on higher labour costs through increasing service prices, before it can phase out its massive stimulus programme. (Reporting by Yoshifumi Takemoto, writing by Leika Kihara; editing by Miral Fahmy)