Reuters, TokyoThe Bank of Japan stated on Thursday that structural labor shortages are forcing many Japanese companies to keep rising wages, indicating that the circumstances for a short-term interest rate increase were still coming together.

The BOJ has stated time and time again that in order to further tighten monetary policy, broad-based, sustainable wage increases are necessary.

According to the central bank's bulletin on the situation of regional economies, companies in various regions of Japan have been raising prices in an effort to raise wages.

Some businesses stated that they have not yet decided how much to increase wages this year, while smaller businesses were hesitant to do so because of the effect that increased costs would have on profits, the BOJ stated in

However, several businesses were already debating specifics of the rate hikes' speed. When taken as a whole, numerous reports indicated that a variety of businesses felt compelled to continue raising pay, it stated.

Two of Japan's nine regions saw an increase in the BOJ's economic assessment, while the remaining regions were said to be picking up or recovering moderately.

At its next policy-setting meeting on January 23–24, the central bank will examine the findings, which were made public following a quarterly meeting of the regional branch managers of the BOJ. At the meeting, some analysts anticipate that the central bank would increase interest rates from the current 0.25%.