Deutsche Securities: BOJ may adjust its description of the degree of monetary easing

Odaily Odaily believes that the Bank of Japan (BOJ) is at a "critical communication crossroads" and needs to decide whether to maintain the current forward guidance wording or adjust its description of the degree of monetary easing.

If the BOJ continues to use the current phrasing, it will face a new challenge if it raises interest rates to 1.25% in the future—how to provide a reasonable explanation for further rate hikes. Since the lower bound of the BOJ's estimated nominal neutral interest rate range is approximately 1.1%, and the policy rate of 1% is already very close to this level, it would be difficult to characterize monetary policy as accommodative if rates rise further above 1.1%. (Jin Shi)