TOKYO: Bank of Japan Governor Kazuo Ueda said on Thursday companies were becoming more active than before in raising prices and wages, signalling his conviction the country was making progress towards sustainably hitting the bank’s 2% inflation target.

Whether wage hikes will broaden and firms begin to lift prices will be key to judging whether the BOJ’s inflation target can be met in a sustainable fashion, Ueda told parliament.

“We expect trend inflation to gradually approach 2%. But we’d like to wait until we have more conviction that sustained achievement of our price target comes into sight,” Ueda said on the timing of an exit from ultra-loose monetary policy.

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“Until then, we will maintain negative interest rates and the yield curve control framework,” he added.

Ueda said it was hard to say now in what order the BOJ could end negative rates and yield curve control, as that would depend on economic and financial conditions at the time.