“Theoretically speaking, [abolishing the negative-rate policy] can happen at any meeting,” Ueda said at a news conference Monday. “But if you ask whether it can happen this year, we only have less than two months left, although I cannot say that such a possibility is zero.”

Ueda said the bank would continue the negative interest rate and yield curve control until a sustainable and stable achievement of the bank’s 2% inflation target comes into sight.

“At this point, I am not sure when we can be confident” about achieving the target, he added.

The BOJ decided last week to maintain its key short-term rate target at minus 0.1%. It also made its 1% cap on the 10-year JGB government bond yield a reference rather than a hard limit to ease side effects.

In a speech to business leaders in the central Japan city of Nagoya earlier in the day, Ueda said it was still not clear whether smaller companies would be able to raise wages again next year because some of those companies provided raises this year despite low profitability.

Still, the BOJ governor said Japan was making progress toward stable inflation.

“The inflation rate will not return to the range of 0% and 1%, which was the pre-pandemic level” even after pressure from higher import prices eases, because the virtuous cycle between wages and prices is expected to strengthen, Ueda said in the speech.

In its quarterly outlook report released last week, the bank’s board said it projects that consumer prices excluding fresh food will rise 2.8% in the year ending March 2025 and climb 1.7% in the following year.

Write to Megumi Fujikawa at [email protected]