Bank of Japan maintained its hawkish inflation predictions and warned of price concerns from a weak yen, signaling that policymakers will raise still-low borrowing costs in a politically heated environment.

Despite the hawkish tone, the yen fell before spiked, alerting traders to likely Japanese currency intervention to support the struggling currency.

After the board kept interest rates stable, BOJ Governor Kazuo Ueda told a press conference that continuous pay hikes were encouraging firms to pass on labor costs.

While providing scant details on the upcoming rate hike, Ueda stressed the need to make quick judgments and not be held back by hard facts, saying the BOJ will use company surveys.

“As prices and wages rise steadily, we must After raising its key policy rate from 0.5% in December, the BOJ held it at 0.75% at a two-day meeting that ended on Friday.

Board member Hajime Takata recommended raising rates for the second straight meeting, but no one else supported it, highlighting the central bank’s hawkish stance.