Photo/Illutration Bank of Japan Deputy Governor Ryozo Himino speaks at a gathering held on Jan. 14 in Yokohama. (Junichi Kamiyama)

YOKOHAMA--A Bank of Japan deputy governor hinted that the central bank could raise interest rates at next week’s Policy Board meeting amid reports of further pay hikes for employees on the horizon. 

Ryozo Himino held a news conference here on Jan. 14 and pointed to the positive signs being delivered recently by corporate executives about raising employee salaries.

“There has been a stronger positive outlook (toward raising salaries) compared to December,” Himino said.

At his own news conference in late December, BOJ Governor Kazuo Ueda said any decision about another interest rate hike would be made after ascertaining the momentum for a salary hike in this spring’s “shunto” labor negotiations as well as the economic policy course to be charted by U.S. President-elect Donald Trump.

Trump will take office on Jan. 20 and the BOJ Policy Board meeting is set for Jan. 23-24.

Prior to his news conference, Himino gave a lecture in which he said Trump will likely set the broad direction for his administration’s economic policy in his inaugural address.

Himino added that the focus of the Policy Board meeting will be whether to raise interest rates.

In March, the BOJ ended its 11-year ultra-loose monetary policy and lifted the negative interest rate policy, which marked its first interest rate hike in 17 years.

In July, the central bank raised the target for the uncollateralized overnight call rate, a rate commercial banks charge on loans to each other, to about 0.25 percent from about 0-0.1 percent.

But the BOJ has maintained that target in three consecutive Policy Board meetings.

In his lecture, Himino noted the comments made this month by corporate executives about boosting salaries. He also noted that at the Jan. 9 meeting of BOJ branch heads, there were many strong reports about wage hikes.

He pointed out the chronic labor shortage companies face as well as the large increase in the national minimum wage last autumn were factors that lead to “expectations that strong results can be expected much like in fiscal 2024.”

In his news conference, Himino said the possibility had also gradually increased for hitting the central bank’s inflation target of 2 percent.