Bank of Japan Gov. Kazuo Ueda met Prime Minister Fumio Kishida on Thursday to explain monetary policy, ahead of the central bank’s next decision later this month, as speculation continues to simmer over the likelihood of near-term policy moves.

Ueda discussed the state of the economy with the prime minister and told him that he would monitor the impact of wages on prices, the governor told reporters at the Prime Minister’s office the same day in Tokyo. They didn’t discuss currencies and Kishida didn’t make any particular requests, Ueda added.

"I can’t talk about the details but we exchanged opinions about economic and financial conditions,” Ueda said. "I explained my basic thinking on monetary policy in line with what I said in parliament this morning.”

The yen firmed against the dollar after Ueda spoke, continuing a strengthening direction that gathered pace after the governor started giving his semi-annual report on monetary policy to parliament in the morning.

During questions from lawmakers, Ueda said that handling of monetary policy would get tougher from the end of the year, a comment that feeds into speculation of looming adjustments.

The yen was around ¥145.87 against the dollar on Thursday afternoon following Ueda’s comments to reporters, compared with around ¥147.11 at the start of his report in parliament in the morning. The yield on 10-year government debt jumped the most in a year, to reach 0.75%.

The meeting came less than two weeks before the central bank gathers, and is likely to make BOJ watchers nervous given that the central bank made a surprise policy tweak in December last year after its chief at the time met the prime minister.

Economists expect the BOJ to pare back stimulus and scrap its negative interest rate over the coming months as inflation continues above the bank’s 2% price target.

Ueda’s remarks come a day after his deputy, Ryozo Himino, hinted that higher borrowing costs may be getting closer, and played down fears over the potential negative impact of a rate hike.

"I mentioned that I’d like to monitor the strength of overall demand and whether wages will continue to rise next year, and whether wage gains will spread to prices, especially those of services,” Ueda said.

Ueda, who became governor in April, has tweaked the bank’s policy gradually, loosening its grip on long-term government bond yields.

The gathering was a regular meeting between a BOJ governor and the prime minister that happens a few times a year, Ueda added.