* Blue-chip firms to wrap up annual 'shunto' wage talks
* Wage hikes seen above 2% but shy of 3% sought by PM Kishida
* PM counts on wage growth to boost wealth distribution
* Inflation needs to rise in tandem with wages to hit 2% target
* Wage hikes not strong enough to boost consumption -analysts (Adds analyst quote, detail)
By Tetsushi Kajimoto
TOKYO, March 16 (Reuters) - Japan's top firms have offered pay rises of more than 2% at annual wage talks that wrapped up on Monday, marking an uptick from the previous year but still falling short of Prime Minister Fumio Kishida's request for a bigger increase to spur growth.
Instead, Japanese workers now look set for another lean year. Wages, which have barely budged relative to the cost of living since the 1990s, remain one of the most pressing problems for the world's third-largest economy, forcing households to save rather than spend.
Kishida, who has called for a wider distribution of wealth, pressed companies to boost pay by 3% or more at the annual "shunto" spring wage talks with unions. While the negotiations are less important than they were decades ago, they still set the tone for much of the economy.
The average increase for big companies won't be known for a few more days, but economists said it looked likely to be north of 2%, a bump from last year's eight-year low of 1.86%.
"Today's outcome was a little stronger than expected," said Hisashi Yamada, senior economist at Japan Research Institute. "Still, the pace of gains turned out to be moderate and it was not strong enough to boost the overall economy."
Yamada said he expects the overall increase to be 2-2.5%.
Conglomerates Hitachi Ltd and Toshiba Corp agreed with their unions to raise overall wages by 2.6% and 2.5%, respectively.
Automakers have already agreed to meet union demands in full, led by Toyota Motor Corp and Honda Motor Co , although they did not disclose rises in percentage terms.
Any boost for workers and the economy is likely to be offset by recent increases in fuel and food prices, economists said.
RIPPLE EFFECT
"The question for us is how much of a ripple effect will this have on small- and medium-sized companies," said Tatsuya Sekiguchi, deputy executive committee chair at Tokyo Union, a labour group that represents workers who don't belong to bigger unions.
"If pay rises only at the big companies there isn't much meaning for us."
Kishida and Bank of Japan governor Haruhiko Kuroda have stressed the need for wage hikes in achieving the 2% inflation target. Still, the premier's target of 3% seemed "too ambitious", according to Masamichi Adachi, an economist at UBS Securities.