OECD Forecasts Japan's Central Bank Rate to Reach 2% by 2027

The Organization for Economic Co-operation and Development (OECD) has projected that Japan's central bank benchmark interest rate will reach 2% by the end of 2027. According to Jin10, the report suggests that if the inflation rate remains around 2%, the current interest rate is still near the lower limit of a neutral range for the economy. The report also recommends that the Bank of Japan should continue to gradually raise interest rates to prevent economic overheating. Previously, the Bank of Japan estimated that the nominal neutral interest rate in Japan ranges between 1.1% and 2.5%, but noted significant uncertainty regarding the exact level.