PGIM Fixed Income said in a report that the Bank of Japan may raise the base rate by another 25 basis points this year. However, if Japanese consumers increase consumption significantly, the Bank of Japan may accelerate the pace of interest rate hikes. It pointed out that the Bank of Japan is gradually raising the nominal policy rate close to 2%, and the latest hike has lifted the rate to an important psychological level of 0.5%. In the long run, PGIM believes that the Bank of Japan believes that a nominal rate of at least 1% is appropriate.