The Bank of Japan (BOJ) decided to raise its key policy interest rate to 1.0% on Tuesday (June 8) following a two-day policy meeting. This is the highest interest rate in 31 years, reflecting growing concerns over inflation.
According to a BOJ statement, the move aims to curb rising inflationary pressures stemming from surging crude oil prices, driven by geopolitical tensions in the Middle East, as well as the impact of a weak yen. The BOJ assessed that current inflation risks exceed its price stability target.
The action marks the BOJ's most aggressive move in decades, as the central bank shifts away from its long-standing ultra-loose monetary policy. The rate hike is expected to help stabilize prices and support the economy amid global uncertainty.
