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

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/33495
Published: 2026-10-16T21:23:36.000Z
Updated: 2026-10-16T21:23:36.000Z
Section: Regulation

> The IMF’s 2026 outlook projects inflation to converge with the BOJ’s 2% target in 2027.

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.