Bank of Japan Governor Kazuo Ueda suggested that he remains flexible regarding the bank's upcoming policy meeting, as traders are eager for clues on the timing of the next rate hike. During a parliamentary session that lasted three hours, Ueda presented the bank's semi-annual report on Wednesday. He reiterated that the BOJ would increase interest rates if the economic forecast unfolds as expected but avoided providing clear indications on when the central bank might raise rates next. Ueda highlighted the upward price trend, mentioning that it has not yet hit the 2% target set by the bank.

Regarding the possibility of a rate hike at the meeting ending on May 1, Ueda's statements caused fluctuations in the yen's value, especially after recent speculations about the wide rate gap with the US. Despite Japan having the highest inflation rate among the Group of Seven countries, its policy rate remains the lowest.

Market analysts anticipated another rate increase between June and September, with some suggesting that a hike could still occur at the meeting on May 1. In February, Japan's consumer prices rose by 3%, exceeding expectations and indicating ongoing inflationary pressure. Prime Minister Shigeru Ishiba plans to mitigate the impact of inflation on consumers through various measures, including cash aid to low-income households and efforts to curtail rising rice prices. Ishiba's handling of inflation issues has sparked public dissatisfaction and negatively impacted his popularity, particularly following allegations of distributing shopping vouchers to newly elected ruling party lawmakers. This situation has left him vulnerable as he approaches the upcoming general election.