By Leika Kihara

TOKYO Bank of Japan Governor Kazuo Ueda said on Friday the country's corporate price-setting behaviour was showing changes that could work to push up inflation more than expected.

He also told parliament that the central bank will scrutinise various pieces of data in producing its next quarterly growth and inflation forecasts in July.

The BOJ currently expects core consumer inflation to slow below the central bank's 2% target in the latter half of the current fiscal year, Ueda said.

"But there is various uncertainty surrounding the inflation outlook. What's important is corporate price-setting behaviour, which is somewhat overshooting expectations," he said.

This year's outcome of annual wage negotiations between companies and unions also led to strong rises in pay, Ueda said.

Japan's core consumer inflation hit 3.4% in April, exceeding the BOJ's 2% target for over a year, as companies continued to pass on rising raw material costs to households.

(Reporting by Leika Kihara; Editing by Christopher Cushing and Sam Holmes)