Bank of Japan Raises Policy Rate to 1.25%, Highest in 31 Years

【Financial News, Tokyo—Correspondent Seo Hye-jin】The Bank of Japan (BOJ) raised its policy rate from 1.0% to 1.25%, an increase of 0.25 percentage points. The hike came just three months after the previous increase in June, taking Japan's policy rate to its highest level since 1995—a 31-year high.
At its monetary policy meeting on the 18th, the BOJ decided by majority vote to raise its target for the unsecured overnight call rate by 0.25 percentage points. Two of the nine policy board members, including board member Doichiro Asada and board member Ayano Sato, voted against the rate hike.
Since abandoning its negative interest rate policy in March 2024, the BOJ has generally raised rates once every six months. This time, however, it delivered another hike after just three months, accelerating the pace of tightening. The move is viewed as a preemptive effort to contain the risk that inflationary pressure could intensify beyond expectations due to rising international oil prices and a weaker yen.
[email protected] Seo Hye-jin Reporter