The Bank of Japan should take into account the risk of inflation overshooting its target when conducting monetary policy, board member Hajime Takata said on Thursday, advocating gradual interest rate increases. He reiterated his view that inflation in Japan has already reached the central bank’s 2% target and that the economy has emerged from a prolonged period of stagnation. His proposal to raise rates in January did not gain support.

Meanwhile, BOJ Governor Kazuo Ueda said the central bank would carefully assess incoming data at its March and April meetings before deciding on interest rates. He left the door open to a near-term policy tightening but provided no specific timeline.

Further rate hikes could support the yen and put pressure on the USD/JPY pair. The exchange rate is currently testing a potential resistance zone near the 157.00 level.