Investing.com — The Japanese yen strengthened on Wednesday after Bank of Japan (BOJ) Governor Kazuo Ueda indicated the central bank may consider hiking if economic and price conditions continue to improve.
Ueda stated that the timing of the rate hikes will largely depend on the economic policies of the new US administration and the progress of this year’s wage negotiations in Japan.
The yen pair fell 0.4% on Wednesday, meaning the yen strengthened 0.4% against the US dollar.
A day earlier, BOJ Deputy Governor Ryozo Himino said the central bank could consider raising rates at its upcoming policy meeting, citing continued wage growth.
Recent economic indicators show that the Japanese economy is experiencing modest growth. In the third quarter, the economy grew by 1.2% annually, driven by higher consumer spending and a stable labor market.
In March last year, the BOJ ended its negative interest rate policy, and by July it had raised short-term interest rates to 0.25%.
It is now considering further rate hikes as inflation has consistently remained above the central bank’s 2% target.
The BOJ’s next policy meeting is scheduled for January 23 and 24.
