(Bloomberg) -- Bank of Japan officials see a discrepancy between what Governor Kazuo Ueda said in a recent interview and how traders interpreted the remarks, according to people familiar with the matter. 

Most of what Ueda said in the Yomiuri newspaper interview published Saturday was consistent with his routine remarks of late. Taken in total, his comments indicate little change in the view among officials that they’ll need to weigh both upside and downside risks in deciding whether to adjust policies, the people said. 

Ueda, a former economics professor, told the Yomiuri the possibility of having enough data to discern a virtuous wage-inflation cycle by the end of this year isn’t zero. But that remark was a general statement rather than a policy signal, the people said.

That’s not how the market saw it. Traders seized on Ueda’s reference to a potential end to negative rates if certain conditions are met, and within a day pricing in the bond market indicated expectations of a hike by January. Economists see April as a more likely time frame.

“A market that has been on its toes for any hawkish sign understandably overreacted to the remarks,” said Francesco Pesole, FX strategist at ING Bank NV. “The chances of actual FX intervention are rising again.”

Ueda’s comments came ahead of a BOJ policy decision next week in which all forecasters surveyed by Bloomberg expect no change.

The yen weakened 0.3% against the dollar on Friday to the lowest level since November 2022, briefly touching 147.95. The yield on 10-year government debt edged down to 0.7%.

BOJ officials also acknowledge that inflation remains strong, requiring them to closely look at upside risks for now, according to the people. That indicates the possibility of an upward revision in a quarterly inflation outlook in October.

--With assistance from Yuko Takeo and Alice Atkins.

(Updates pricing and adds analyst comment in fifth paragraph.)

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