The Bank of Japan has decided to raise its policy rate by 0.25 percentage points to 1.25% at its monetary policy meeting on the 17th and 18th of this month. The rate is expected to reach its highest level in about 31 years, reportedly in response to upside risks to prices.
The Bank of Japan has decided to raise its policy rate by 0.25 percentage points to 1.25% at this month’s monetary policy meeting, it was learned. A policy rate of 1.25% would be the highest level in about 31 years, since April 1995.
While the domestic economy remains firm, the BOJ has cited higher crude oil prices, yen depreciation and growing AI-related demand as sources of upward pressure on prices and as the background to the rate hike. It has also indicated that lending is currently on an increasing trend and that accommodative financial conditions are expected to continue.
The BOJ has so far raised rates roughly once every six months, but is reportedly set to introduce an additional measure three months after its June rate hike.