S&P 500 Retreats From Record High as AI Stocks Slide, Retail Sales Disappoint 
KOSPI Rebounds 20% as Samsung, SK Hynix Lead South Korea Stock Rally 
US Dollar Slips as Softer PPI Data Eases Fed Rate Hike Expectations 
KOSPI Eyes Best Weekly Gain Since June as Samsung, SK Hynix Rally 
Japan Government Backs Earlier BOJ Rate Hike as Inflation Pressures Build 
Canada-US Trade Talks Gain Momentum Ahead of Aug. 19 Tariff Deadline 
Gold Prices Slip From 10-Week High as Fed and Hormuz Risks Shape Outlook 
Australia Inflation Cools as Core CPI Misses Forecasts, Easing RBA Rate Hike Pressure 
Asian Currencies Steady Ahead of US CPI as Oil Prices Rise 
Eurozone Bond Yields Fall as Oil Slump Eases Inflation Fears Ahead of Central Bank Meetings 
Add as a preferred source on Google
Investors hoping the Bank of Japan will reveal clearer guidance on how high interest rates might rise may be disappointed, according to several former BOJ officials. Governor Kazuo Ueda’s recent hawkish tone has pushed markets to nearly fully price in a December rate hike from 0.5% to 0.75%. His comments about offering more insight into how far the policy rate is from the “neutral rate”—the level that neither stimulates nor slows economic growth—have intensified market speculation about Japan’s future rate path.
Currently, the BOJ estimates Japan’s nominal neutral rate to fall somewhere between 1% and 2.5%. A hike to 0.75% would bring the policy rate close to the lower boundary of that range, prompting some analysts to predict the central bank will revise its estimate upward. Such a move could signal that Japan still has room to raise rates without harming economic momentum.
However, former BOJ insiders believe the central bank will avoid releasing any precise figures. Seisaku Kameda, formerly the BOJ’s top economist, said Ueda may hint at where within the range the neutral rate sits but will avoid specific commitments. He emphasized the importance of “constructive ambiguity,” allowing the BOJ flexibility amid high uncertainty.
Ayako Fujita, a former BOJ official and now JPMorgan’s chief Japan economist, expects the bank to reinforce that 1% represents only the lower end of the neutral rate and that the true level could be higher. She suggested the BOJ may want markets to assume a neutral rate closer to 1.5%, though communicating this without triggering volatility will be challenging.
Other central banks also avoid defining a clear neutral rate because it is difficult to measure and shifts with economic conditions such as productivity trends. Some market participants argue the BOJ must remain hawkish to prevent renewed yen depreciation, but former BOJ staffer Nobuyasu Atago warns that overly aggressive signals could spark a sharp spike in bond yields.
