Bank of Japan raises benchmark rate by 0.25 percentage point to 1%, highest in 31 years

[Financial News, Tokyo = Correspondent Seo Hye-jin] The Bank of Japan (BOJ) decided at its monetary policy meeting on the 16th to raise its benchmark rate by 0.25 percentage point, from 0.75% to 1%. A rate in the 1% range is the highest since September 1995, or 31 years ago. The move appears to reflect concerns that rising global oil prices, driven by escalating tensions in the Middle East, could further push up inflation in Japan.
According to Nihon Keizai Shimbun and other outlets, the BOJ concluded its two-day policy meeting and decided to raise the short-term policy rate, its benchmark rate, by 0.25 percentage point from around 0.75% to around 1%. 
The BOJ began normalizing policy in March 2024, when it ended its negative interest rate policy for the first time in 17 years. In July that year, it raised the benchmark rate from 0% to 0.1% to around 0.25%.
In January last year, it raised the rate to around 0.5%, and in December it increased it to around 0.75%. The BOJ then kept the benchmark rate unchanged at four consecutive policy meetings.
Meanwhile, the BOJ decided to halt its planned reduction in government bond purchases after April next year, citing the need to stabilize the bond market. The decision is seen as reflecting its intention to normalize monetary policy gradually while minimizing market disruption.
sjmary@fnnews.com Seo Hye-jin Reporter