Deutsche Securities says the BOJ faces a communications crossroads: it must
choose to keep current forward‑guidance wording or recharacterize the degree of
monetary ease. If wording is unchanged, a move to a 1.25% policy rate would
create a new challenge in justifying further hikes; with the BOJ’s estimated
lower bound of the nominal neutral rate at about 1.1% and the policy rate
already near 1.0%, policy above ~1.1% would be difficult to describe as
accommodative.
