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Bank of Japan raises rates to 1% for first time since 1995

The move marks a major shift in Japanese monetary policy and could ripple through global currency, bond and risk-asset markets.

Summary

The Bank of Japan has raised interest rates to 1%, marking the first time since 1995 that its policy rate has reached that level. The decision signals a significant turn in Japan’s monetary stance after years of ultra-loose settings, a shift closely watched by investors because changes in Japanese rates can influence the yen, government bond yields and broader risk appetite across global markets.

Terms & Concepts
  • Bank of Japan: Japan’s central bank, which sets monetary policy.
  • monetary policy: Central bank actions to influence borrowing costs and economic activity.
  • government bond yields: Returns investors demand to hold government debt.