BoJ will raise rates at slow pace

Mizuno told a business community in Fukuoka City in southern Japan that "we will adjust the level of interest rates 'slowly' by carefully monitoring economic and price developments."

"What concerns me is that when the bank sends out the message of 'slow interest rate adjustment,' there is a risk that it could be misunderstood as 'no more rate hike this year' and cause long-term interest rates to fall despite improvement in economic fundamentals," Mizuno said.

He said the central bank will steer monetary policy with a stance of "data dependence" by monitoring various indicators, not just the core consumer price index that he said many market participants are focused on.

"Personally, I am interested in labor indicators, such as the jobs-to-applicants ratio, wages, nonfarm payrolls and full-time employment," Mizuno said.