STORY: The Bank of Japan will debate whether to raise interest rates next week.
That was the word from Governor Kazuo Ueda Wednesday (Jan 15), which signaled the central bank's intent to take borrowing costs higher.
The remarks pushed up the yen as markets priced in the chance of a rate hike at the bank's next policy meeting on Jan. 23-24.
Japan's yen gained 0.5% against the dollar after Ueda's remarks.
Ueda said the BOJ would raise rates if improvements in the economy and prices continue.
But he added the key to deciding the rate-hike timing came down to U.S. President Donald Trump's economic policy, and the momentum of this year's wage negotiations in Japan.
Last month, analysts polled by Reuters predicted the BOJ would raise rates to 0.5% by the end of March.
But they were divided on whether the move would come in January or a later meeting in March.
Markets have focused on the BOJ's views on wages and the U.S. policy outlook.
That after Ueda cited uncertainty over the domestic wage outlook and Trump's policies as reasons to hold off raising rates last month.
Ueda's upbeat view on the wage outlook suggests their is only one hurdle to clear in hiking rates next week.
That would be the risk of Trump's remarks causing volatility in financial markets.
The BOJ's Deputy Governor has said the "broad direction" of U.S. economic policy would likely become clear in Trump's inaugural address on Monday.
