BoJ’s Uchida: We have overcome the zero lower bound

Bank of Japan (BoJ) Deputy Governor Shinichi Uchida said on Monday that “we have overcome the zero lower bound.”

Additional quotes

We still have a big challenge to anchor the inflation expectations to 2%, the end of our battle is in sight.

This time is different.

We have overcome the zero lower bound.

We returned to a conventional monetary policy framework, aiming at a 2% price stabilitytarget through adjustments of the short-term policy rate, which means we have overcome thezero lower bound.

Labor market conditions have changed structurally and irreversibly.

Not so clear if Japan has overcome deflationary norm.

The main driving force for these developments and long-waited structural changes is labor shortages.

Higher menu costs, together with mild inflation, have slowed the pace of price adjustment.

And for us, the central bank, this requires more effort to get out of this situation.

Market reaction

At the time of writing, USD/JPY is losing 0.15% on the day to trade at 156.75.