Bank of Japan (BoJ) Governor Kazuo Ueda kept his policy options open by reiterating the bank’s long-held stance on interest rates, avoiding sending any clear signals about the prospects for a rate hike when the board meets later this month.“If the baseline scenario for economic activity and prices outlined so far is realised, the bank, in accordance with improvement in economic activity and prices, will continue to raise the policy interest rate,” Ueda said Friday in a speech to local business leaders in Osaka.Ueda refrained from telegraphing any policy changes after market speculation over an impending rate hike gained momentum in recent weeks. Two board members dissented from the decision to hold settings steady last month, and a member considered dovish cited the heightened need for policy change in a speech earlier this week.Instead, Ueda took a more neutral tack by highlighting the factors officials are monitoring as they mull the timing for a rate shift.“To determine whether economic activity and prices are improving, the bank will, for the time being, monitor factors such as the points I mentioned,” Ueda said, citing the global economy — especially the US economy — and the impact of US tariffs on Japan’s corporate profits as factors to watch. He added that wage and price trends including food inflation required attention.The yen weakened as much as 0.4% to 147.82 against the dollar after Ueda spoke.“Some dovish comments from Ueda have prompted selling of the yen,” said Akira Moroga, chief market strategist at Aozora Bank. “While the market had expected Ueda to sound more hawkish, the governor refrained from taking an aggressive posture toward rate hikes.”Still, the mere reiteration of the existing policy stance will likely keep alive market speculation over a rate hike when authorities next set policy on October 30, as the governor refrained from backing or opposing such notions.Pricing in the overnight swaps market shows that traders see about a 56% chance for a move at that meeting, up sharply from around 22% early last month, though down from levels seen earlier in the week.The annual Osaka conference tends to be where BoJ governors deliver one of their most important speeches of the year. Friday’s event comes days after the central bank released its latest Tankan survey — the first time since 2013 that the key speech followed the quarterly survey. The timing fuelled market speculation that the bank might wish to lay the groundwork for a hike after examining the closely watched dataset. It showed business sentiment at a solid level.“Given the corporate sentiment until now, we can say that the likelihood is rising for our economic outlook to be realised,” Ueda told reporters later Friday. “But, looking ahead, it doesn’t give us strong information over the future impact of US tariffs.”Japan’s inflation has stayed at or above the BoJ’s 2% target for more than three years. Ueda has justified a gradual approach to rate hikes by explaining that the underlying trend remains shy of the target.At the September meeting, board members Naoki Tamura and Hajime Takata called for hiking rates. It was the first time in Governor Ueda’s tenure that more than one member had dissented from a vote to hold steady.Ueda didn’t cite political uncertainty among the factors he’s monitoring, but it’s likely he’ll be closely watching when the ruling Liberal Democratic Party selects a new leader on Saturday.Sanae Takaichi, a top contender for the party race and an advocate of monetary easing, said borrowing costs shouldn’t be raised while the other four candidates said monetary policy should be left to the central bank, Kyodo News reported Thursday, citing a survey.Another emerging uncertainty comes from a US government shutdown that began Wednesday. Economic data releases from the US are expected to be delayed as a result, including the unemployment report scheduled for Friday.“It’s a severe problem,” Ueda said. “We just have to gather information by various ways and make a decision” if the absence of data lasts until the October meeting, he said.