Bank of Japan Deputy Governor Shinichi Uchida said the central bank can proceed with interest rate hikes at a pace in line with market expectations, keeping alive views that there is a chance of a near-term increase in borrowing costs.

SHIZUOKA - Bank of Japan (BOJ) Deputy Governor Shinichi Uchida said the central bank can proceed with interest rate hikes at a pace in line with market expectations, keeping alive views that there is a chance of a near-term increase in borrowing costs.

Bank of Japan Deputy Governor Shinichi Uchida signaled that the benchmark interest rate remains on a gradual upward path, in remarks that may quell speculation of an early move.

The Bank of Japan's holdings of Japanese government bonds continue to exert a strong monetary easing effect, Deputy Governor Shinichi Uchida said on Friday. Uchida, speaking in parliament, also said Japan's underlying inflation rate is gradually rising towards the central bank's 2% target as the economy sustains a moderate recovery path.