Central Banks
BOJ’s Policy Rate Likely to Reach 2% by End-2027, OECD Says
A Japanese flag flies outside the Bank of Japan headquarters in Tokyo.
Photographer: Toru Hanai/BloombergThe Bank of Japan’s policy rate is expected to reach 2% by the end of 2027, according to a new estimate from the Organisation for Economic Co-operation and Development.
Assuming inflation remains around 2%, the current policy rate is still near the lower end of a range that would be neutral for the economy, the OECD said in its economic surveys released Wednesday. It added that the BOJ should continue raising interest rates gradually to prevent the economy from overheating.