Bank of Japan (BOJ) board member Asahi Noguchi struck a neutral tone in his speech on Thursday, emphasizing the importance of acting at the right moment while avoiding further fueling market expectations for a December rate hike.

Speaking to local business leaders in Oita Prefecture, southwestern Japan, Noguchi stated, "The central bank must carefully assess how various economic transmission channels ultimately impact economic activity and prices, and use interest rate tools at the appropriate time to adjust the degree of monetary easing."

Noguchi's latest remarks show a softening compared to his more hawkish comments in recent months. In September, he surprised traders by saying the need to adjust interest rates was higher than ever. Against the backdrop of recent hawkish signals from several board members, Noguchi's Thursday speech may help prevent further strengthening of December rate hike expectations.

Noguchi suggested the most realistic policy path would be to first establish a roughly neutral interest rate range as a benchmark, then gradually and incrementally raise rates while closely monitoring their impact on the economy and prices.

The former economics professor added, "This is what I consider to be the BOJ's steady, step-by-step approach to policy adjustment."