Yen may keep rising and weigh on inflation, Adachi says
Adachi warns of uncertainty over next year39;s wage talks
BOJ must scrutinise risks, avoid premature rate hike
BOJ will eventually raise rates to levels deemed neutral

TOKYOTAKAMATSU, Japan, Oct 16 Reuters The Bank of Japan must raise interest rates at a very moderate pace and avoid hiking prematurely, its policymaker Seiji Adachi said on Wednesday, warning that further yen rises and slowing global demand may weigh on inflation and wage growth.

Adachi said Japan39;s economy has already met the conditions for normalising ultraloose monetary policy, with the economy remaining on a firm footing and price rises broadening.

But he warned of various economic uncertainties that required taking a cautious approach in raising interest rates.

The yen may keep rising from multidecade lows as the U.S. Federal Reserve enters a fullfledged monetary easing cycle, which would push down Japanese import costs and weigh on consumer inflation, he said in a speech to business leaders in Takamatsu, western Japan.

There is also doubts on whether Japanese firms will keep raising wages sufficiently next year due to lingering global risks such as uncertainty over the outcome of the U.S. presidential election, as well as slowing Chinese and U.S. demand.

Given high uncertainty surrounding global developments, there is significant uncertainty over next year39;s wage developments in Japan. We must carefully monitor the situation,…