Bank of Japan Raises Rates to 30-Year High

The Bank of Japan has raised its key interest rate by 0.25 percentage points to 1%, citing the weakening yen and rising prices that are adding to inflationary pressures.

According to the Financial Times and Euronews, the move brings the rate for unsecured overnight loans to its highest level in roughly 30 years.

The decision marks another step in the Bank of Japan’s gradual normalization of monetary policy after decades of ultra-low and negative interest rates aimed at supporting lending, consumption and economic growth.

Japan is facing rising energy costs as the country remains heavily dependent on imports of oil and natural gas. Higher commodity prices in recent months have increased costs for both households and businesses.

The weakness of the yen has also contributed to inflationary pressures. The Japanese currency recently fell to around 160 yen against the US dollar, with years of low interest rates helping to drive its long-term decline.

Ahead of the announcement, Japan’s Nikkei 225 stock index briefly climbed above the 70,000-point mark.

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