The Bank of Japan will raise interest rates gradually while carefully monitoring the economic situation, the central bank's deputy governor said Friday.
"The market's focus now seems to be the timing of the next rate hike, but I can only say that we will conduct monetary policy by carefully examining economic and price moves," Toshiro Muto told economists and business executives attending a seminar.
On July 14, the BOJ raised interest rates for the first time in six years, lifting a key overnight rate from zero to 0.25 percent.
The Bank of Japan had kept interest rates at zero for five years and pumped extra cash into the financial system to spur a recovery, which now is under way.
Investors and analysts are now waiting to see when the bank may raise interest rates next.
Muto echoed recent remarks from BOJ Gov. Toshihiko Fukui, who said rate hikes will come slowly. Muto said the bank will keep very low interest rates for some time.
"We will adjust policy rates gradually based on economic and price changes," Muto said.
The July 14 interest rate increase underlines the growing view that the country is on a solid growth track after emerging from stagnation spanning more than a decade, and that the danger of deflation, or falling prices, is now under control.