NAGOYA (Kyodo) -- Bank of Japan chief Kazuo Ueda said Monday the central bank will weigh whether to raise its interest rate at its next policy meeting later this month, citing heightened expectations of robust wage hikes and "significantly reduced" uncertainty over U.S. tariffs.

In a meeting with local business leaders in Nagoya, central Japan, Ueda appeared to signal that the conditions are falling into place for another interest rate hike, expressing its resolve to adjust the degree of monetary easing without being "too late or too early."

Ueda, who has seen continued wage growth as a key factor to achieve the BOJ's goal of stable inflation at 2 percent, said in a speech that the central bank is "actively collecting information regarding firms' stance" on pay hikes ahead of the Dec. 18-19 policy-setting meeting.

The BOJ "will consider the pros and cons of raising the policy interest rate and make decisions as appropriate," Ueda said, adding that the likelihood of its baseline scenario for inflation being realized is "gradually increasing."

At a press conference after his speech in Aichi Prefecture where Toyota Motor Corp. is headquartered, the governor sounded positive about the prospects for the annual labor-management wage talks early next year as corporate profits will likely remain at high levels despite the impact of the U.S. trade levies.

Ueda also said it is necessary to continue examining the impact of the trade levies on Japan's exports and U.S. consumer prices, while monitoring economic indicators from the world's largest economy, which have been suspended due to the recent government shutdown.

After the previous policy meeting in October, in which the BOJ held steady, Ueda said the central bank needs to assess wage developments when deciding whether to resume interest rate hikes.

Following his remarks, the yen strengthened to the mid-155 level from the lower 156 range against the U.S. dollar, as market participants took his remarks as a signal of a possible rate hike at the next gathering, dealers said. Long-term Japanese government bond yields also rose.

Financial markets have been anticipating a rate hike, probably from the current 0.5 percent to 0.75 percent, with several BOJ board members recently suggesting that a further increase is on the table.

The upcoming policy meeting comes amid persisting inflationary pressures in Japan, partly due to the yen's depreciation. A weak yen raises import costs for resource-scarce Japan.

The governor said that currency movements are more likely than before to impact prices, adding, that attention is also warranted on the possibility that these "price developments" could influence "underlying inflation" through shifts in inflation expectations.

Some market participants believe it has become difficult for the BOJ to raise rates under the government of Prime Minister Sanae Takaichi, an advocate of monetary easing.

However, Ueda said that raising the benchmark rate under accommodative financial conditions is about "easing off the accelerator" toward achieving stable economic growth and price developments, and "not about applying the brakes."

He also said that raising borrowing costs will be necessary to smoothly achieve the price stability target and guide Japan's economy onto a long-term growth path, which "will ultimately lead to the success of the efforts undertaken by the government and the bank thus far."

The central bank left its benchmark rate unchanged at around 0.5 percent in October for the sixth straight policy meeting, but two hawkish members -- Hajime Takata and Naoki Tamura -- proposed a rate hike to around 0.75 percent at the past two gatherings.