By Megumi Fujikawa

Japan is likely close to completely overcoming its decades-long deflation, according to Bank of Japan Deputy Gov. Shinichi Uchida.

"While we still have a big challenge to anchor the inflation expectations to 2%, the end of our battle is in sight," Uchida said in a speech Monday. "The labor market structure appears to have changed after the pandemic, and wages are likely to continue increasing," he added.

In March, the bank decided to raise interest rates for the first time since 2007, saying a positive cycle of wages and prices are finally starting to work. Uchida's comments are likely to add to the view that the bank is on a path to gradually tightening monetary policy.

According to government data, inflation has remained above the bank's 2% target for two years. Overall consumer prices rose 2.5% from a year earlier in April.

Write to Megumi Fujikawa at

(END) Dow Jones Newswires

05-26-24 2309ET