BOJ's Suda says must tolerate rate rises

She also told business leaders in Okinawa, southern Japan, that it was hard to see consumer prices in Japan stabilising above zero -- the criteria for the central bank to end its ultra-loose monetary policy -- in the near term.

Japan's government has the largest public debt burden of any industrialised nation from years of massive bond issuance and is very sensitive to the possibility of rising interest rates.

Suda added that she did not see Japan's recovery spreading to smaller firms in the business year that began in April.