The Bank of Japan releases the latest estimate of the natural interest rate

MaticHoleFiller · 2026-04-01T08:35:18+00:00

The Bank of Japan announced its latest estimate of the natural interest rate, ranging from -0.9% to +0.5%, which is roughly the same as before. Although the range has not changed much, recent forecast values have slightly increased, reflecting a higher potential growth rate. The central bank will consider the data comprehensively to assess monetary policy.

MaticHoleFiller

2026-04-01 08:35:18

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The Bank of Japan released its latest estimate for Japan’s natural rate of interest on Friday, showing that its range is approximately -0.9% to +0.5%.

The range is largely in line with the previous estimate (-1.0% to +0.5%).

The natural rate of interest refers to the level of real interest rates that keeps economic activity and prices neutral; it is an important concept in the implementation of monetary policy.

In a staff paper, the Bank of Japan said: “Although the range of the natural rate itself has not changed much, careful analysis reveals that many recent forecasts have risen slightly,” a development that reflects an improvement in Japan’s potential growth rate.

The paper said that, given uncertainty in the natural rate estimates, the Bank of Japan will take comprehensive account of various data to gauge the degree of monetary easing.

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