(Bloomberg) -- Japan’s biggest union federation demanded its biggest pay hike since 1993, adding further fuel to speculation that the nation’s central bank may move in March to raise interest rates for the first time since 2007.

The Japanese Trade Union Confederation, known as Rengo, said 3,102 affiliated unions demanded an average wage increase of 5.85%, or ¥17,606 ($118.88), at this year’s annual pay talks compared with 4.49% a year ago. 

Stronger demands from unions this year augur well for wage talks this year, with the initial results of Rengo pay negotiations due for release on March 15, the last working day before the Bank of Japan meets to decide on policy.

The figure comes as market players ramp up their bets on an early BOJ move following other positive wage reports and news that some BOJ officials favor an early move while some government officials also support a rate hike. The growing speculation has pushed up the yen and bond yields.

Read more: BOJ Bets Swing Toward March Rate Hike as Wages Beat Estimates

BOJ Governor Kazuo Ueda has repeatedly said he won’t raise rates until he’s satisfied that wages are feeding into a positive price cycle that supports economic growth, a national goal for more than a decade. While last year’s pay raises were the strongest in decades, wages have continued to lag inflation.

“Ueda has said spring wage negotiations are important so many times that it makes sense for the BOJ to make the move in March if initial results come out above 4%. That way, the BOJ will find it easier to explain its policy change,” said Mari Iwashita, chief market economist at Daiwa Securities Co.

“If he waits until April, the BOJ will have to cut its growth outlook given the weakness of production and consumption. Then, it will be harder for the BOJ to raise interest rates,” she said.

Earlier in the day UA Zensen, a labor union consisting of over 1.8 million members from sectors including retail and restaurants, unveiled very early results of its negotiations. They showed full-time workers landing average wage gains of 6.7%, well in excess of the corresponding tally of 5.3% a year ago.

Rengo chief Tomoko Yoshino said the UA Zensen result may help Rengo achieve solid wage increases in its final push ahead of the March 15 deadline. “I’d like to hope that in some sense the numbers will help move us in a positive direction,” Yoshino said at a press conference.

--With assistance from Momoka Yokoyama.

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