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Tue, 16 Jun 2026

Tue, 16 Jun 2026 Japan raises interest rate to highest since 1995

The Bank of Japan has been raising rates from near-zero since 2024.
Japan's central bank, Bank of Japan (BOJ), raised its main interest rate by 25 basis points to a new 31-year high on Tuesday. The rate was increased from 0.75% to 1%, marking its highest level since 1995. This decision comes as a response to the surge in global energy prices and inflation, which has been fueled by the recent war in Iran. Japan's interest rates had been near zero for two decades due to low growth and deflationary pressures. However, with wholesale prices rising by over 6% in May from a year earlier, the BOJ is now seeking to cool inflation. The rate hike is expected to have a mixed impact on the economy, as it may help lower inflation but also increase borrowing costs for businesses and the government.