Investing.com– The Japanese yen strengthened on Wednesday after Bank of Japan (BOJ) Governor Kazuo Ueda indicated that the central bank may consider raising if economic and price conditions continue to improve.

Ueda stated that the timing of interest rate hikes will depend on the economic policies of the new US administration and the progress of this year’s wage negotiations 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 at an upcoming policy meeting, citing continued wage growth.

Recent economic indicators show that the Japanese economy is experiencing moderate growth. In the third quarter, the economy grew at an annual rate of 1.2%, driven by increased consumer spending and a strong labor market.

In March last year, the BOJ ended the negative interest rate policy, and in July, it raised the short-term policy rate to 0.25%.

Further rate hikes are now being considered as inflation has consistently remained above the central bank’s 2% target.

The BOJ’s next policy meeting is scheduled for January 23-24.