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(Bloomberg) — Japanese workers’ base salaries grew the most in 32 years, offering signs that a positive economic cycle is emerging, keeping the central bank on track for near-term additional rate hikes.

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Base salaries increased by 2.7% in November from a year ago to drive up nominal wages by 3%, the labor ministry reported Thursday. Economists had expected nominal pay to rise 2.7%. A more stable measure of wage trends that avoids sampling problems and excludes bonuses and overtime showed wages for full-time workers gained 2.8%, remaining at or above 2% for 15 months. 

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In a more discouraging development, real cash earnings dropped 0.3% from a year earlier, extending the streak of declines to four months. Stagnation in real wages was partly driven by inflation outpacing pay growth, as price gains strengthened in November after the government halted subsidies for utility bills, pushing up energy costs.

The relatively steady wage trend may refuel speculation over a near-term rate hike from the Bank of Japan, including in the upcoming policy decision meeting this month. Since BOJ Governor Kazuo Ueda gave dovish comments at the post-December meeting press conference, market participants’ views have tilted toward expecting the next policy change to come later. 

Overnight swaps on Thursday reflected around 46% chance of a rate hike at the January meeting. The BOJ is set to meet in about two weeks.

Ueda said that he would like to see more data before making further tightening steps, particularly regarding the sustainability of wage growth. That has drawn attention to developments leading up to the spring wage negotiations. 

Last year the BOJ conducted its first rate hike in 17 years in March, shortly after the nation’s largest trade union federation Rengo announced that its members had secured the highest wage increases in over three decades.

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This year, Rengo plans to release its initial tally on March 14 and update it to incorporate the results of smaller firms at a later date. The BOJ’s policy meeting results that month will come five days later. Rengo is aiming for at least a 5% wage increase across all companies, with a slightly higher 6% target for small and medium-sized enterprises to narrow disparities.

There are already some promising signs from individual companies, including retail giant Aeon Co. and insurer Nippon Life Insurance reportedly planning to raise the salaries of some employees by at least 6%. Japan’s persistently tight labor market is also likely to keep pressure on companies to continue raising wages to attract and retain talent.

Even ahead of the BOJ’s January meeting, several events may give additional insight into the latest wage trends. The bank is scheduled to release its latest regional economic report following its branch managers meeting later Thursday, and Deputy Governor Ryozo Himino is set to give a speech to local business leaders in Yokohama next week.

Governor Ueda also indicated in December that the momentum of wage negotiations could become apparent even before Rengo’s official tally in March. 

(Updates with more details from the report, background.)

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