The Bank of Japan is set to keep monetary policy steady on Friday, but signal its confidence that solid wage growth and consumption will allow the central bank to raise interest rates again in coming months.

The Bank of Japan left interest rates unchanged on Friday, but governor Kazuo Ueda said further hikes remain on the cards if the economy grows as predicted.

The Bank of Japan has opted to hold short-term interest rates, pointing to a moderate recovery in the economy but warning that “high uncertainties” remain in the outlook for activity and prices. In a widely expected decision on Friday,