The Bank of Japan raised its policy rate to 1.25%, bringing it to its highest level in 31 years. The yen subsequently weakened, and the Nikkei 225 in the Tokyo market rose by more than ¥1,100.
At its Monetary Policy Meeting, the Bank of Japan raised the policy rate from the current level of around 0.50% and set it at 1.25%. The measure was taken with the aim of curbing long-term market interest rates and maintaining price stability, bringing the rate to its highest level in more than 30 years. The stated objective is to maintain financial market stability and achieve the price target.
Following the decision, downward pressure on the yen against the US dollar intensified, and the yen-per-dollar exchange rate showed an upward trend. Attention to currency movements increased, particularly among export-related companies, and some observers said the decision could also affect overseas capital flows.
In the Tokyo market, the Nikkei 225 gained more than ¥1,100 over the course of trading. Several media outlets reported that the combination of the yen's decline and the rate hike affected investor sentiment, with buying prevailing.