Bank of Japan board member Toyoaki Nakamura said on Thursday it was premature to tighten monetary policy as recent increases in inflation were mostly driven by higher import costs rather than wage gains.

While many firms raised pay this year, there was uncertainty on whether smaller companies can earn enough profits to keep hiking wages next year and beyond, the former executive of electronics giant Hitachi said.

Tightening monetary policy before rising prices are accompanied by higher wages would hurt domestic demand and corporate profits, Nakamura said.