Bank of Japan's Neutral Interest Rate Estimates Suggest Potential for Further Rate Hikes

The Bank of Japan has released new estimates indicating that Japan's neutral interest rate is between 1.1% and 2.5%, which is higher than the current policy rate of 0.75%. According to NS3.AI, the report highlights that several indicators in the latest estimates suggest a gradual increase in interest rates. The bank noted that this could potentially raise the upper limit of the neutral range, providing more scope for additional rate hikes.