Junko Koide, a member of the Bank of Japan Policy Board: Japan's neutral interest rate is above 1%

```htmlGolden Ten Data reported on May 21 that Bank of Japan Policy Board member Junko Koide said on Thursday she believes Japan’s nominal neutral interest rate is above 1%. Based on current staff estimates, the Bank of Japan considers the actual neutral interest rate to be around -0.9% to +0.5%. Assuming inflation fluctuates near the Bank of Japan’s 2% target, this would mean the nominal neutral interest rate ranges from 1.1% to 2.5%. “My view is that the lower limit of Japan’s neutral interest rate may be above 1%,” Koide stated at a press conference. The nominal neutral interest rate is closely watched by the market because it can guide how far the central bank’s short-term policy rate is from a level that is neutral to the economy. The Bank of Japan currently sets the short-term policy rate at 0.75%.```