ON MARCH 5th Seven & i Holdings, owner of the 7-Eleven convenience-store chain and Japan’s largest retailer, gathered some of its employees at the Yokohama Arena baseball stadium for an announcement. It would, it said, pay 54,000 of them more this year: some would get their first basic-salary hike in four years.

This was so startling that NHK, Japan’s public broadcaster, led its nightly news with the story. Its lead presenter said he hoped it would encourage other firms to follow suit. Aghast interviewees on the streets of Yokohama told NHK they could not remember the last time their basic pay had gone up. Toshifumi Suzuki, Seven & i’s boss, spoke of the deflationary impact of falling wages in Japan, which forces firms regularly to reduce prices on everything from chocolate bars to salad. “This vicious cycle must be stopped,” he said.

Seven & i’s move offered a hint of promise in the battle by Shinzo Abe, Japan’s new prime minister, to bludgeon Japan out of 15 years of deflation (see chart). But economists say it is unlikely many firms will follow suit, at least until they have a better sense of whether growth is more sustainable or whether the currency is permanently weaker, boosting exports. In fact, they say, Mr Abe’s campaign may be primarily political. Having nominated a team of tough-talking money-printers as governor and deputy governors of the Bank of Japan, he is determined that the central bank should hit its new 2% inflation target. The problem is, if prices rise but wages don’t, workers will feel the pinch. That would not bode well for an upper-house election in July in which Mr Abe hopes his ruling Liberal Democratic Party will secure a majority in both chambers of parliament. Hence the pressure applied by Mr Abe and his finance minister, Taro Aso, on big businesses to increase worker compensation. Amid signs of rising consumer sentiment and household spending in January, some have responded positively. Lawson, another convenience-store operator, said higher bonuses this year would boost the annual average pay of a worker with three school-age children by ¥150,000 ($1,600). Other firms, especially exporters benefiting from the falling yen, are likely to agree to union demands for higher bonus payments in annual pay talks this spring. But Keidanren, the main big-business lobby, has remained cool, saying it wants to see more sustainable profit growth before its members agree to basic-pay increases, which are harder to reverse than bonus payments. Masamichi Adachi of J.P. Morgan says overtime and bonus payments are likely to rise before core salaries do. He says that, rather than higher inflation expectations, the country needs higher growth expectations before companies commit to permanent wage increases. As it is, a planned rise in the consumption tax next year is likely to offset some of the effect of a big fiscal stimulus this year, which means growth may flatten in late 2014.

There is a danger, Mr Adachi adds, that the popularity of Mr Abe’s policies will quickly decline if the public perceives they are getting “cost-push” inflation caused by rising prices, rather than “demand-pull” inflation, caused by rising wages. “A reflationary policy is initially quite well received until inflation actually comes.”