TOKYO - The Bank of Japan released an updated estimate Friday placing Japan’s natural rate of interest between -0.9% and +0.5%.
The range remains nearly identical to its prior assessment of -1.0% to +0.5%.
Defined as the real interest rate neutral to economic activity and inflation, this metric guides monetary policy decisions.
BOJ staff note that while the band hasn’t shifted significantly, recent internal estimates show a moderate upward trend - partly reflecting stronger potential growth.
Due to inherent uncertainty in measuring the natural rate, the BOJ will continue relying on comprehensive data to gauge monetary accommodation levels.