By Makiko Yamazaki, Takaya Yamaguchi, and Tim Kelly

TOKYO (Reuters)

The Bank of Japan should wait for at least six months before hiking interest rates, according to Yuichiro Tamaki, head of the opposition party that the ruling Liberal Democratic Party (LDP) is courting for support.

"There should be no significant changes to monetary policy, as we need to observe the wage growth trends from next year's spring negotiations," Tamaki said in an interview with Reuters.

Following Japan's general election on October 27, Tamaki's party, the Democratic Party for the People (DPP), has gained influence over government policy as the ruling LDP seeks its support to maintain power.

The LDP, along with its coalition partner Komeito, is 18 seats short of a majority in the 465-member lower house, while the DPP, advocating for higher wages and cuts to sales and income tax, increased its seat count from seven to 28.

The Bank of Japan ended negative interest rates in March and raised short-term rates to 0.25% in July, believing that Japan was progressing towards achieving its 2% inflation target sustainably.

At Thursday's policy meeting, the central bank held short-term rates at 0.25% but indicated that risks around the U.S. economy were somewhat subsiding, signaling conditions may be right to raise interest rates again soon.

However, Tamaki stressed the need to eventually normalize monetary policy to allow the market to operate properly. He warned that maintaining easy monetary policy could weaken the yen but noted that the U.S. economy's strength creates a wide gap between U.S. and Japanese interest rates. He added that monetary policy should not aim to manipulate currency rates.

He refrained from commenting on current currency levels but stated that currency interventions have only a temporary effect, though they could deter speculative actions.