Bank of Japan is reported to have kept all its options open to increase interest rates beyond expectations as the yen's continued weakness heightens upside risks to inflation, Bloomberg News reported Wednesday, citing people familiar with the matter.

The Japanese central bank is expected to keep its policy rates unchanged at its July 31 board meeting after revising the benchmark interest rate upward by 1% in June.

Policymakers do not expect another rate hike before December, after the June revision, which is stated to be the highest in 31 years.

The Bank of Japan did not immediately respond to a request for comment from MT Newswires.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)