Japan's largest labor union will demand a basic pay hike of around 2 percent in addition to a seniority-based rise in the annual spring wage talks for fiscal 2016.

The Japanese Trade Union Confederation (Rengo) made the decision at a meeting in Tokyo Thursday. It will be the union's third consecutive demand for a basic pay hike.

The government of Prime Minister Shinzo Abe has urged businesses to raise wages to help the economy as he tries to stoke inflation of 2 percent.

Rengo sought a pay hike of 1 percent or higher for fiscal 2014, the first in five years, and a hike of 2 percent or more for fiscal 2015, which ends March 31.

Rengo's figures show that unions within the confederation won offers of ¥6,354 ($53) per month on average in the 2015 wage negotiations, including automatic pay rises. This was up ¥426 from the previous year.

The rates for the hikes came to 2.20 percent, up 0.13 point from a year earlier, with the basic pay hike averaging ¥2,024, or 0.69 percent higher than the previous year, according to Rengo.