The Governor of the Bank of Japan, Kazuo Ueda, reiterated that the Bank of Japan needs to closely monitor various risks, but he did not suggest the possibility of raising interest rates next month.

Ueda spoke at a business meeting in Tokyo on Wednesday, stating, "The timing and pace of adjustments to monetary easing will depend on the developments in economic activity, prices, and future financial conditions."

Ueda stated that as labor shortages drive up wages, Consumer has shown signs of improvement, and he emphasized the progress Japan has made in achieving the Bank of Japan's price target sustainably after years of aggressive monetary stimulus.

He stated that the Bank of Japan expects the economy to be closer to sustainably achieving its 2% inflation target next year. However, he added, "The central bank needs to closely monitor various risk factors both domestically and abroad, and examine how these factors will affect the outlook and risks for Japanese economic activity and prices, as well as the likelihood of achieving this outlook; more data is needed to assess the momentum of the spring annual wage negotiations and the outlook for the USA economy."

This speech was delivered after his dovish remarks last week, which surprised observers of the Bank of Japan and led to a drop in the yen as market expectations for a rate hike in January next year diminished.

Earlier, Japanese authorities issued a new warning of intervention. Finance Minister Kato Katsunobu expressed deep concern to reporters about recent currency movements, including those driven by speculation, and reaffirmed his warning from last week.

Suzuki added, "The government will take appropriate measures to address excessive Forex volatility," a standard hint at potential intervention.

On Friday, the Bank of Japan will release the summary of opinions from its most recent meeting. The summary may provide more details on the hawkish committee member Tamura Naoki's proposal to raise interest rates, which could support a stronger yen. However, if the summary mainly emphasizes the necessity for caution, the yen may decline again.