On June 16, Deutsche Bank stated that the Bank of Japan is at a "critical communication crossroads," needing to decide whether to maintain its current forward guidance or adjust its description of the degree of monetary easing. If the Bank of Japan continues to use the current wording, it will face a new challenge in the future if it raises interest rates to 1.25%—how to provide a reasonable explanation for further rate hikes. Given that the lower bound of the nominal neutral interest rate estimated by the Bank of Japan is around 1.1%, and the current policy rate of 1% is already very close to this level, it will be difficult to describe monetary policy as accommodative if rates rise further above 1.1%.