Bank of Japan (BOJ) board member Junko Nakagawa has said the economy is making steady progress towards achieving its 2% inflation target and signaled conviction that conditions for phasing out its massive stimulus are falling into place.

The remarks came as Japan's largest industrial labor group said some member unions had seen their wage demands met in full by management, heightening prospects of a broad-based pay rise the BOJ has set as a prerequisite for exiting its stimulus program.

All eyes are on BOJ Gov. Kazuo Ueda's scheduled appearance in parliament later on Thursday, where he will likely be grilled for clues on how soon the central bank will end its negative interest rate policy and other stimulus tools.