The Bank of Japan’s October 2023 outlook report predicts that core Consumer Price Index (CPI) inflation, excluding fresh food and energy, will be 1.9% in both fiscal years 2024 and 2025. This projection suggests a potential move toward returning the short-term policy rate to zero. The rationale behind this lies in the possibility of justifying an end to negative rates once the forecast is upgraded to 2.0%, demonstrating increased confidence in meeting the inflation target. The FY26 forecast, set to be released in April 2024, may not be an absolute necessity for this decision. I anticipate the rate reaching zero as .

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