Kazuo Ueda: The Bank of Japan can currently only estimate the neutral interest rate level within a relatively wide range.

According to Jinse Finance, Bank of Japan Governor Kazuo Ueda stated that currently the neutral interest rate level can only be estimated within a relatively wide range. The market widely expects that the central bank may raise interest rates again this month, bringing rates closer to the neutral level. “Regarding the neutral interest rate, unfortunately, we can currently only estimate it within a fairly broad range,” Kazuo Ueda said in parliament on Thursday. “We do not know its precise level, but how much and how high the nominal interest rate will eventually rise, and what is appropriate, will depend on this. I want to emphasize that there is some uncertainty involved.” Kazuo Ueda added that the Bank of Japan is trying to narrow the estimated range for the neutral interest rate, and if successful, will announce it to the public. The Bank of Japan previously released a research report stating that the neutral interest rate is roughly between 1% and 2.5%.