Prime Minister Shigeru Ishiba sought to show he isn’t pressuring the Bank of Japan over interest rate policy, saying that he was aligned with BOJ Governor Kazuo Ueda’s view that there was time to assess the situation in markets and the economy before making any changes to rates.

Ishiba, who was officially appointed as prime minister on Tuesday, had been seen by markets as endorsing the BOJ's policy normalisation, in part because of his comments to Reuters in August that a gradual hike in ultra-low rates will help boost Japan's profitability.

The Bank of Japan kept interest rates steady on Friday and revised up its assessment on consumption, signalling its confidence a solid economic recovery will allow the central bank to raise interest rates again in coming months.

“Impact of FX volatility on Japan's inflation has increased than in the past,” Bank of Japan (BoJ) Governor Kazuo Ueda said on Wednesday. Japan's economy recovering moderately albeit with some weak signs. Trend inflation, which is likely still below 2%, likely to gradually accelerate.