By Leika Kihara

NAGOYA (Reuters) -Financial institution of Japan Governor Kazuo Ueda stated on Monday the financial system was making progress in reaching sustained inflation backed by rising wages, signalling that circumstances for elevating rates of interest once more have been progressively falling in place.

“We expect wage-driven inflationary pressure to heighten, as the economy continues to improve and companies keep hiking pay,” Ueda stated in a speech to enterprise leaders within the central Japan metropolis of Nagoya.

However the BOJ chief stated the central financial institution should stay vigilant to exterior dangers, resembling lingering uncertainty over the U.S. financial outlook and still-jittery monetary markets.

“The chance of the U.S. economy achieving a soft-landing scenario appears to be increasing. But we still need to scrutinise developments,” Ueda stated.

Market sentiment was additionally bettering on account of receding concern over the U.S. financial outlook, although the prospect of renewed volatility remained given numerous geo-political dangers, he stated.

Ueda repeated the BOJ will hold elevating rates of interest if financial and price developments transfer consistent with its forecasts.

“The timing for when we’ll adjust the degree of our monetary support will depend on the economic, price and financial outlook,” he added.

The dearth of clear steerage on the timing of the subsequent BOJ charge hike appeared help the greenback, which was final up 0.4% to 154.77 yen.