Toyota Motor Corp (7203.T), the world’s biggest automaker, said on Wednesday it would accept a union demand for the biggest base salary increase in 20 years and a rise in bonus payments, as Japan steps up calls for businesses to hike pay.

As one of Japan’s biggest employers, Toyota has long served as a bellwether of the spring labour talks, which are in full swing at major companies. Many are expected to conclude swiftly as the government seeks inflation-beating wage hikes to ease burdens on consumers.

Toyota’s incoming president Koji Sato said the decision to accept the union’s demands in full set a benchmark for pay negotiations that he encouraged the rest of the automotive industry to follow, according to an internal publication on the company’s website.

The union federation representing 357,000 Toyota group workers had said the base pay rise it had sought was the biggest in two decades, though it had not detailed the size of the increase.

With inflation running at the highest level in 40 years, Japan is under more pressure than ever before to raise wages to revive consumption.

But with the economy struggling – it averted recession in the fourth quarter but grew much less than expected – analysts say pay increases will remain limited to big firms, such as Toyota.

Small and medium-sized companies, which employ most Japanese workers, will struggle to afford pay rises, they say.