BOJ: Real Interest Rates Have Risen Recently but Remain Low at Short End

The BOJ's shift from fighting deflation to guarding against overshoot is the substantive change here, and it lands as real rates, though higher, stay low at the short end and financing costs remain comfortable against profits. That combination supports the observed pickup in corporate funding demand and a constructive lending stance, so the near-term transmission channel runs through credit creation rather than through rate levels alone. The open question is whether import-driven pressures from Middle East conflict and FX volatility force a faster normalization than the still-low short-end real rate implies, particularly with AI-related demand adding its own impulse to activity.