By Leika Kihara
TOKYO (Reuters) -Prospects of sustained wage gains in Japan and the boost to import costs from a weak yen have heightened attention within the central bank to rising inflationary pressures that may lead to an upgrade in its price forecast this month, sources said.
Even if the Bank of Japan were to raise its inflation forecast, the upgrade alone won’t lead to an interest rate hike if it is driven by temporary factors such as the rising price of rice and higher import costs, said three sources familiar with the bank’s thinking.
The BOJ could hike rates this month if the board is convinced that sustained, broad-based wage hikes will take hold, and keep inflation durably at its 2% target, they said.
“Risks to inflation are skewed to the upside due partly to renewed yen falls,” said one of the sources, a view echoed by another source.
“Wage momentum also appears to be strong,” a third source said, adding the board may…
