BOJ will hike rates if its forecasts are met, says Nakagawa
BOJ must take into account market rout impact on economy
Nakagawa warns of upside risks to Japan39;s inflation outlook
Economy on track but markets remain unstable, says Nakagawa

TOKYOAKITA, Japan, Sept 11 Reuters The Bank of Japan will continue to raise interest rates if inflation moves in line with its forecast, policymaker Junko Nakagawa said, signalling that last month39;s market rout has not derailed the bank39;s plan to hike borrowing costs steadily.

But the central bank must take into account the impact that such market moves could have on the outlook for the economy and prices when considering whether to raise rates, she added.

Her comments pushed up the yen as markets took them as a renewed sign the BOJ could raise rates in coming months. The dollar stood at 140.79 yen on Wednesday, down more than 1 and hitting the lowest level since Dec. 28, also weighed down by the outcome of the U.S. presidential debate.

Given real interest rates are currently very low, we will adjust the degree of monetary support, from the standpoint of sustainably and stably achieving our 2 inflation target, if our economic and price forecasts are met, Nakagawa said in a speech to business leaders in northern Japan on Wednesday.

Core consumer inflation hit 2.7 in July and has been at or above the 2 target for 28 consecutive months.

Nakagawa39;s remarks follow those by another member of the BOJ39;s policy board, Hajime…