Raising of interest rates: Bank of Japan Governor Kazuo Ueda emphasised the central bank's commitment to adjusting interest rates in response to changes in inflation trends, particularly if they accelerate towards the 2 per cent target. However, he noted that there is no predetermined schedule for rate hikes and the timing and pace will depend on evolving economic conditions.

Ueda highlighted the importance of maintaining an accommodative monetary policy stance given that trend inflation remains somewhat below the 2 per cent target. This suggests that the BOJ will continue with its ultra-loose monetary policy for the time being.

His statements precede the BOJ's upcoming policy meeting, where it is expected to keep interest rates unchanged and release new quarterly growth and inflation forecasts. Sources anticipate that the BOJ will project inflation to hover around the 2 per cent target over the next three years, reinforcing expectations of further interest rate hikes later this year from their current near-zero levels.

With Reuters Inputs