Bank of Japan Governor Ueda Kazuo says the central bank will closely monitor global uncertainties and financial market volatility as it makes its monetary policy decisions.

In a speech on Wednesday, Ueda said, "The outlook for the US and other overseas economies remains uncertain and financial markets are still unstable. We will keep a close watch on such developments with a high degree of vigilance".

Ueda also said the BOJ expects inflation to move roughly in line with the bank's 2 percent target.

But he noted uncertainty remains about the Japanese economy and prices, citing risk factors related to foreign economic trends and resource costs.

Ueda said after last month's BOJ policy meeting that the central bank would consider another rate hike if the board members were confident in their outlook for prices and economic activity.