Investing.com- The Japanese yen strengthened on Wednesday after Bank of Japan (BOJ) Governor Kazuo Ueda indicated that the central bank may consider a hike if economic and price conditions continue to improve.
Ueda said the timing of interest rate hikes will largely depend on the economic policies of the new US administration and the progress of wage negotiations this year 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 may consider raising rates in the upcoming policy meeting, citing stable wage growth.
Recent economic indicators show that Japan's economy is experiencing modest growth. In the third quarter, the economy expanded at an annual rate of 1.2%, driven by increased consumer spending and a stable labor market.
Last March, the BOJ ended its negative interest rate policy, and by July, it had raised the short-term policy rate to 0.25%.
A rate hike is now being considered as inflation has remained consistently above the central bank's 2% target.
The BOJ's next policy meeting is scheduled for January 23-24.
