by Leika Kihara

TOKYO (Reuters) – The Bank of Japan (BoJ) maintained its ultra-accommodating monetary policy on Tuesday, as expected, highlighting the desire of its decision-makers to wait to see if wages will increase enough to maintain the long-term inflation around the 2% target.

Once again, the central bank promised to take “without hesitation” any additional monetary easing measures if this were necessary.

Markets are awaiting the press conference of BoJ Governor Kazuo Ueda at 06:30 GMT for any clues on the shift that the institution could make in its monetary policy.

During its two-day meeting, the Japanese central bank maintained its short-term interest rate target at -0.1% and its commitment to setting long-term yields around zero.

“There are extremely high uncertainties surrounding the economy and prices in Japan,” the BoJ said in a statement, as inflation remains below 2% for more than a year and some companies have signaled their desire to further raise wages – which fuels the hypothesis of monetary tightening by the BoJ in the short term.

More than 80% of economists polled last month by Reuters said they expected the BoJ to end negative interest rates next year. Half of them believe that this shift will likely take place in April, while some see monetary tightening as early as January.

(Reporting Leika Kihara; Jean Terzian)

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