{"id":568275,"date":"2026-03-27T18:03:14","date_gmt":"2026-03-27T18:03:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/568275\/"},"modified":"2026-03-27T18:03:14","modified_gmt":"2026-03-27T18:03:14","slug":"boj-re-estimates-japans-estimated-natural-rate-of-interest-after-review","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/568275\/","title":{"rendered":"BOJ re-estimates Japan&#8217;s estimated natural rate of interest after review"},"content":{"rendered":"<p>Using latest data, the estimate of the natural rate of<br \/>\ninterest is around -0.9% to +0.5%That estimate is as of Q3 2025BOJ latest estimation is based on six models, including time-series and structural modelsAlthough the<br \/>\nrange itself has not changed significantly, a closer look<br \/>\nreveals that many of the estimates have recently been<br \/>\nmoderately on the riseThe rise reflects a rebound in Japan&#8217;s potential growth rate after the Covid pandemic and also an<br \/>\nenvironment in which wages and prices are both rising<br \/>\nmoderately becomes entrenched<a href=\"https:\/\/www.boj.or.jp\/en\/research\/wps_rev\/rev_2026\/rev26e04.htm\" target=\"_blank\" rel=\"nofollow noopener noreferrer\" class=\"article-link\" data-v-4026719d=\"\">Full assessment<\/a><\/p>\n<p class=\"text-align-justify\" data-v-4026719d=\"\">All that being said though, the BOJ does note that &#8220;there are<br \/>\nmany caveats when it comes to its (natural rate estimate) use in actual policy<br \/>\nconduct&#8221;. Adding that it is also still difficult to pin down the level of natural rate of interest in advance.<\/p>\n<p class=\"text-align-justify\" data-v-4026719d=\"\">But based on the statistical evidence, the BOJ will work with that to adjust the degree of monetary accommodation towards sustainably achieving its 2% price target.<\/p>\n<p class=\"text-align-justify\" data-v-4026719d=\"\">Once again, this looks to be just some added proof to cover all their bases. That after the releasing a new monthly core CPI estimate <a href=\"https:\/\/investinglive.com\/centralbank\/boj-set-to-release-indicators-for-estimated-core-cpi-every-month-now-20260326\/\" target=\"_blank\" class=\"article-link\" data-v-4026719d=\"\" rel=\"nofollow noopener\">here<\/a> yesterday.<\/p>\n<p class=\"text-align-justify\" data-v-4026719d=\"\">As mentioned then, the BOJ has come under quite a bit of scrutiny &#8211; not least from the Japanese government itself &#8211; on continuing to pursue the path of raising interest rates despite recent data showing some decline in underlying inflation pressures.<\/p>\n<p class=\"text-align-justify\" data-v-4026719d=\"\">So by estimating a higher level of the natural rate of interest, it is a signal that higher policy rates are needed to avoid conditions such as the economy overheating and\/or to keep inflation in check.<\/p>\n","protected":false},"excerpt":{"rendered":"Using latest data, the estimate of the natural rate of interest is around -0.9% to +0.5%That estimate is&hellip;\n","protected":false},"author":2,"featured_media":568276,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-568275","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/568275","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=568275"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/568275\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/568276"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=568275"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=568275"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=568275"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}