Bank of Japan Decides to Raise Interest Rates to Around 1.25％, Highest Level Since 1995
The Bank of Japan decided Friday to raise the target range for short-term interest rates, also known as the policy rate, from around 1.0% to around 1.25% at a monetary policy meeting on Friday.
On Friday, the Bank of Japan announced a decision to increase the target range for short-term interest rates, also known as the policy rate, from approximately 1.0% to around 1.25%. This marks the highest level for the policy rate since 1995, with the change taking effect on September 24.
The bank felt compelled to take this action due to concerns that prices might rise beyond expectations, driven by increasing crude oil costs and a weaker yen. This marks the first rate hike since the June policy meeting, and it is the shortest interval between rate hikes since Japan ended its large-scale monetary easing measures, including its negative interest rate policy, in March 2024.
The decision to raise rates was supported by seven out of the nine policy board members, which include the governor, deputy governors, and board members. However, Toichiro Asada and Ayano Sato voted against the decision, suggesting that the policy rate should remain around 1.0%. They both proposed maintaining the current level.
During a meeting with U.S. Treasury Secretary Scott Bessent on August 30, the Bank of Japan's policy decisions were praised. Bessent expressed support for Japan taking decisive market and monetary policy measures to address the issue of excessive yen weakness.
Written by urgent.news from The Japan News by The Yomiuri Shimbun's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
