Bank of Japan Gov. Kazuo Ueda has said that the central bank’s price target is not already in sight, a comment that may temper speculation the bank’s first rate hike since 2007 could come as early as March.

"We are not yet in a position to foresee the achievement of a sustainable and stable inflation target,” Ueda said on Thursday after meeting with Group of 20 central bankers and finance chiefs in Sao Paulo. "We will continue to seek confirmation whether the virtuous cycle between wages and price began to turn.”

Ueda played down the significance of Japan’s slide back into a technical recession as a leveling off of strong post-pandemic growth and expressed his confidence in the economy. His remarks reinforced the view that the BOJ is still largely on track to raise rates once it has sufficient evidence to support the move.

"There has been no change so far in our view that Japan’s economy is recovering moderately and will continue to do so going forward,” said Ueda.

Ueda said that wage negotiations, expected to culminate in March, will be key for confirming whether the economy is in what he calls a virtuous cycle. Ueda said there’s reason to expect positive results from the wage talks. He said demands from workers are outpacing last year’s level, while many companies are active in responding to their requests.

The initial results of annual wage negotiations between Japan’s biggest union federation and companies will be released on March 15, just a few days before the BOJ’s next meeting on policy.

Most BOJ watchers expect the central bank to scale back its stimulus in April, while not ruling out the possibility of a shift in March.

Ueda’s attendance at the conference in the South American nation garnered more-than-usual attention, as his government counterpart, Finance Minister Shunichi Suzuki, decided to stay home to focus on passing the national budget. G20 member nations discussed a wide range of topics including global economic risks, international taxation and geopolitical tensions.

Ueda said the biggest takeaway from the gathering was confirmation that his G20 peers share the outlook for a soft landing in global economy. The bank has cited the global economy as a major risk factor.