Goldman Sachs now expects the Bank of Japan to hike rates Tuesday
A woman takes photos under the Kanzakura cherry trees in full bloom in Ueno Park, Tokyo. Kanzakura cherry trees herald the early arrival of spring in Tokyo.

Goldman Sachs now expects the Bank of Japan to raise interest rates for the first time in 17 years at its March meeting this week, bringing forward its previous forecast for an April decision.

The bank's senior Japan economist Tomohiro Ota cited stronger-than-expected salary gains at the annual "shunto" wages negotiations and subsequent Japanese news reports of an exit from negative rates at the BOJ's March meeting that ends Tuesday.

"The BOJ has not sent any signal denying the news so far," Ota wrote in a Monday note. "Together, these developments imply that the BOJ probably no longer needs more data for the policy change, nor to wait to justify the policy change with the quarterly Economic Outlook report in April."

While a slim majority of economists are still expecting the central bank to raise rate in April, an increasing number of economists have moved their forecasts forward to March in the last two weeks amid signs that salary negotiations this year will be far more robust than expected.

Ota said he expects the BOJ to abolish its yield curve control policy, which the central bank employs to target longer-term interest rates, by buying and selling bonds as necessary. Still, he expects the central bank will "not explicitly commit" to the size of its Japanese government bond purchases or the cessation of its ETF purchases.