The Bank of Japan will raise interest rates and adjust the degree of monetary support if improvements in the economy and price conditions continue, Governor Kazuo Ueda said on Wednesday.

The deputy governor said the bank will discuss whether to raise the policy rate or not at the meeting, based on the latest outlook on the economy and prices.

Following Ueda’s remarks, the yen strengthened as much as 0.4% to ¥157.34 against the dollar, after earlier hovering around the ¥158 level.

The Bank of Japan will debate whether to raise interest rates next week as prospects of sustained wage gains heighten and the U.S. policy outlook becomes clearer in President-elect Donald Trump's inaugural address,

Bank of Japan Deputy Governor Ryozo Himino reiterated that the central bank will raise rates if its outlook continues to be realized, while adding that there are risks both at home and abroad that require attention.

Bank of Japan Deputy Governor Ryozo Himino has signaled that an interest rate hike may be on the cards at the monetary policy meeting on January 23-24, as many of the shocks to the Japanese economy and deflationary factors have been resolved.