Bank of Japan lifts policy rate to a 31-year high of 1%
Per the Straits Times, the Bank of Japan raised its short-term policy rate from 0.75% to 1%, lifting borrowing costs to a level unseen since 1995. The decision supported the yen and pushed up government bond yields. This is not investment advice.
According to the Straits Times, the Bank of Japan raised its short-term policy rate from 0.75% to 1%, taking borrowing costs to levels last seen in 1995 and continuing its exit from many years of ultra-loose monetary policy.
Governor Kazuo Ueda said inflation continues to run above target and that further moves would be data-dependent. The yen strengthened against the US dollar after the announcement, while ten-year Japanese government bond yields moved higher across the curve.
Global investors are watching how the BOJ manages potential dislocations in the Japanese government bond market as it tightens further. On the Tokyo exchange, exporter shares pulled back while banking and insurance stocks gained ground, in line with the typical response to higher domestic rates. This is not investment advice.
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