Bank of Japan hints at further rate hike as wage growth firms

Bank of Japan Governor Kazuo Ueda signalled the central bank is prepared to raise rates further if wage growth broadens across the economy. A second tightening step appears to be approaching after January's historic exit from negative interest rates.

The spring wage-negotiation round at Japan's largest firms produced the biggest pay rises in 33 years. If the trend extends to smaller firms, the BOJ may act in the second half of the year.

The yen strengthened 0.6% against the dollar, pulling back below 155. Japanese 10-year yields added 5 basis points to 1.05%.