Skip to main content

BoJ policy rate will reach 2% by 2030

The recent period of high inflation in Japan has kick-started a virtuous cycle between wages and prices. If inflation expectations remain elevated and structural forces push up the neutral rate of interest over the coming years, monetary policy will become increasingly looser if the Bank of Japan keeps its policy rate around 0%. The upshot is that price pressures will continue to strengthen, forcing the Bank to lift interest rates in earnest. We now expect both inflation and the Bank’s policy rate to settle at 2% by 2030.

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services

Get access