Japan’s 1.25% Policy Rate Sits Within IMF’s Neutral-Rate Range

The International Monetary Fund expects the Bank of Japan (BOJ) to keep raising rates gradually toward neutral, with policy decisions remaining flexible and data-dependent amid uncertainty around global conditions and the neutral rate. The IMF estimates Japan’s nominal neutral rate at 1.1% to 2.2% as of the second quarter of 2025. The BOJ’s current policy rate is 1.25%, within that range. The IMF’s 2026 Japan outlook projected inflation to rise during 2026 before converging with the BOJ’s 2% target in 2027. Riza Dagoc reports on regulation, investing and the digital-asset business for TokenPost. Send corrections or tips to info@tokenpost.com.

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