Japan's largest labour organisation Rengo is set to demand wage hikes totalling 5% or more, its internal documents showed on Thursday.

The demand, to be formally decided by December when Rengo finalises its stance towards next year's wage negotiations.

Policy makers have said wage hikes are a major issue in Japan as the world's third biggest economy strives to put an end to deflation and sustain inflation at 2% in a stable manner. (Reporting by Tetsushi Kajimoto; Editing by Muralikumar Anantharaman)