Bank of Japan Governor Kazuo Ueda said he told new Prime Minister Shigeru Ishiba in a meeting on Wednesday that the central bank was supporting Japan's economy and will move cautiously in deciding whether to raise interest rates further.

Ishiba, who was officially appointed as prime minister on Tuesday, had been seen by markets as endorsing the BOJ's policy normalisation, in part because of his comments to Reuters in August that a gradual hike in ultra-low rates will help boost Japan's profitability.

The Bank of Japan should weigh any additional interest-rate increases carefully in order to avoid the risk of cooling the economy too much, the country’s new economics minister said.