The Bank of Japan is reportedly planning further interest rate hikes, with some officials believing the neutral interest rate will be higher than 1%.

According to sources familiar with the matter, Bank of Japan officials believe that interest rates are likely to rise above 0.75% before the end of the current rate hike cycle, suggesting that there may be more rate hikes after next week's increase. These sources stated that officials believe even at 0.75%, the Bank of Japan has not yet reached its neutral interest rate level. Some officials already consider 1% to be below the neutral rate. The sources indicated that even if the Bank of Japan updates its neutral interest rate estimate based on the latest data, it does not currently expect the range to narrow significantly. The Bank of Japan's current estimate for the nominal neutral interest rate range is approximately 1% to 2.5%. The sources also stated that Bank of Japan officials believe that the upper and lower limits of this range may themselves contain errors. (Jinshi)