BOJ Expected to Raise Rates to 1% and Consider Pausing Bond Taper
The Bank of Japan (BOJ) is expected to raise its short-term policy rate from 0.75% to 1% at its June 15-16 meeting, driven by persistent wholesale inflation and cost pass-through by companies. Markets price an 80% probability of the hike. Additionally, the BOJ may consider pausing its bond taper program in the next fiscal year, signaling a cautious shift in monetary normalization as it balances inflation control with market stability.
Cross-source coverage
Wire timeline
Bank of Japan Deputy Governor Himino Delivers Semiannual Report on Monetary Policy and Economic Outlook
The Bank of Japan Deputy Governor Ryozo Himino presented the Semiannual Report on Currency and Monetary Control to the Diet, detailing recent economic and financial developments and monetary policy decisions. Japan's economy has recovered moderately, but faces headwinds from Middle East tensions and high crude oil prices. The year-on-year CPI inflation (excluding fresh food) is around 1.5%, but is expected to accelerate clearly above 2% due to rising energy costs. Underlying inflation is projected to reach levels consistent with the 2% target between H2 fiscal 2026 and fiscal 2027. The Bank raised the policy interest rate to around 1.0% at the latest MPM, judging that monetary accommodation should be adjusted given inflation risks. The financial system remains stable with robust capital bases. Future rate hikes will be gradual, depending on economic data, price developments, and the impact of the Middle East situation.
All categoriesBOJ Deputy Governor Himino Presents Semiannual Report on Monetary Control
On 19 June 2026, Bank of Japan Deputy Governor Ryozo Himino delivered a statement to the House of Representatives Committee on Financial Affairs, presenting the Bank's Semiannual Report on Currency and Monetary Control. He reported that Japan's economy has recovered moderately, though weakness persists partly due to the Middle East situation. Exports and industrial production are flat while business investment increases moderately and private consumption remains resilient. CPI inflation excluding fresh food is around 1.5% due to government energy subsidies, but is expected to accelerate above 2% as crude oil prices rise. The BOJ decided at its June Monetary Policy Meeting to raise the policy interest rate to approximately 1.0%, judging that underlying inflation is approaching the 2% target and financial conditions remain accommodative. Future rate hikes will depend on economic activity, price developments, and monitoring risks from the Middle East, AI-related demand, and foreign exchange fluctuations.
All categoriesJapan Raises Interest Rates to 1%, Highest Since 1995, Reviving Yen Carry Trade
The Bank of Japan (BOJ) raised its short-term policy rate from 0.75% to 1% on June 17, 2026, a level not seen since 1995, in a move to normalize monetary policy amid inflation pressures from the Iran war-driven energy crisis. The decision passed 7-1, with board member Toichiro Asada dissenting over concerns that the Middle East conflict poses a greater threat to growth than inflation. The BOJ also announced continued cuts to government bond purchases, targeting monthly purchases of 2 trillion yen by April 2027. The rate hike was partly driven by persistent yen weakness, which prompted Japan to spend 11.7 trillion yen ($73.5 billion) on currency intervention in May, though with limited lasting impact. The article notes that the yen carry trade—borrowing cheaply in yen to invest in higher-yielding currencies—is gaining momentum again amid low global market volatility. At the time of writing, the yen traded at 160.29 per dollar, and 10-year JGB yields rose to 2.647%.
Yahoo FinanceBank of Japan raises rates to 1%, highest since 1995
The Bank of Japan raised its benchmark interest rate to 1% on June 16, 2026, the highest level since 1995, continuing its monetary normalization cycle that began in 2024. The decision was approved by 7 of 8 board members, with Toichiro Asada dissenting. The rate hike comes amid a weak yen and energy-driven inflation pressures linked to the Iran war, with Japan's producer price index rising 6.3% year-on-year in May. Core inflation stood at 1.4% in April, below the BOJ's 2% target, partly due to government subsidies on gasoline and tuition. The BOJ also announced it will reduce monthly JGB purchases by 200 billion yen per quarter until reaching 2 trillion yen per month by April 2027. Markets responded positively, with the Nikkei 225 gaining 0.46% and the yen strengthening to 160.22 per dollar.
Yahoo FinanceBank of Japan Raises Rates to 1%, Highest Level Since 1995
The Bank of Japan (BOJ) raised its benchmark interest rate to 1% on June 16, 2026, marking the highest level in over three decades. The quarter-point hike continues the monetary normalization cycle initiated in 2024. The decision was supported by seven of eight board members, with Toichiro Asada dissenting. The move comes amid a persistently weak yen, which has hovered around 160 per dollar despite intervention, and price pressures exacerbated by the Iran war driving energy costs. Japan's May producer price index rose 6.3% year-on-year. While core consumer inflation remains below the BOJ's 2% target at 1.4% partly due to government subsidies like gasoline tax suspension, the bank warned of wholesale price pressures filtering through to consumer goods. Separately, the government approved an additional 3 trillion yen for household energy relief. The BOJ also announced it will reduce monthly JGB purchases by 200 billion yen per quarter, targeting 2 trillion yen per month by April 2027. Markets responded positively, with the Nikkei 225 gaining 0.46% and the yen strengthening slightly to 160.22 per dollar.
Yahoo FinanceBank of Japan Hikes Rate to 31-Year High, Citing Inflation
The Bank of Japan raised its benchmark interest rate to 1% on June 16, 2026, a 31-year high, citing inflationary pressures from a weak yen and soaring oil prices due to the war in Iran. The quarter-point increase from 0.75% marks continued normalization of monetary policy after decades of ultralow rates. The Japanese yen has fallen to about 160 per U.S. dollar. Tokyo's Nikkei 225 index briefly topped 70,000 for the first time before settling at 69,871.13. BOJ Governor Kazuo Ueda was hospitalized and did not attend the policy meeting; Deputy Governor Shinichi Uchida was expected to lead the subsequent news conference.
The Hindu: Latest News today from India and the World, Breaking news, Top Headlines and Trending News Videos.Bank of Japan raises interest rates to 31-year high in widely expected move
The Bank of Japan (BOJ) raised its short-term policy rate to 1% from 0.75% on June 16, 2026, marking a 31-year high and a key step in normalizing monetary policy. The decision, passed by a 7-1 vote, was driven by broadening price pressures from the energy shock caused by the Iran war. Deputy Governor Shinichi Uchida, standing in for Governor Kazuo Ueda who was hospitalized, noted that inflation risks remain despite a recent US-Iranian peace deal. The dissenting vote came from new board member Toichiro Asada, who argued downside risks from the Middle East conflict outweigh inflation concerns. The BOJ stated that the risk of economic deterioration from the conflict has diminished due to alternative energy procurement, but warned that rising oil costs are being passed on rapidly, potentially pushing underlying inflation above target.
The Business TimesBank of Japan raises interest rates to 31-year high in widely expected move
The Bank of Japan raised its short-term policy rate to 1% from 0.75% at a two-day meeting ending on Tuesday, marking the first rate increase since December 2025. The decision, passed by a 7-1 vote, brings the policy rate to levels unseen since 1995, a 31-year high. The move was widely expected by markets and analysts. The rate hike reflects the BOJ's continued normalization of monetary policy amid evolving economic conditions.
The Business TimesBank of Japan Hikes Rates to 1%, Highest Since 1995, as Yen Weakens
The Bank of Japan raised its policy rate to 1% on Tuesday, the highest level in over 30 years, in a move widely expected by economists. This is the first rate hike since December 2025, when rates were raised to 0.75%. The decision was split 7-1, with board member Toichiro Asada dissenting. The tightening comes amid a persistently weak yen, which has languished around the 160 level against the dollar despite Japan spending 11.7 trillion yen ($73.5 billion) on intervention in May. Inflation has crept up partly due to the Iran war, though April core inflation eased to 1.4%, below the BOJ's 2% target. Analysts note that low inflation figures are partly due to policy measures like removing the gasoline tax and making high school free. Prime Minister Sanae Takaichi's administration enacted a 3 trillion yen supplementary budget to shield households from rising energy costs.
US Top News and AnalysisJapan central bank set to hike rates to highest since 1995 despite governor absence
The Bank of Japan is expected to raise interest rates to their highest level since 1995, despite the absence of its governor. The central bank anticipates inflation will accelerate later this year. Markets will closely watch for clues on the timing of future moves, with traders remaining wary of potential currency intervention after the meeting if the yen weakens. The decision marks a significant shift in Japan's monetary policy stance.
The Business TimesJapan central bank set to hike rates to highest since 1995 despite governor absence
The Bank of Japan (BOJ) is expected to raise interest rates to their highest level since 1995, driven by a weak yen that intensifies inflationary pressures for the resource-importing nation. The decision comes despite the absence of the central bank governor. The BOJ anticipates inflation will accelerate later this year as higher energy costs from the Middle East conflict feed through the economy. The rate hike marks a significant shift in Japan's monetary policy stance.
The Business TimesBank of Japan to consider pausing bond taper next fiscal year, sources say
The Bank of Japan (BOJ) is expected to consider pausing its bond taper program in the next fiscal year, according to sources. At its upcoming June 15-16 meeting, the BOJ will review its current bond taper plan, which runs through March next year, and lay out a new plan. Additionally, the central bank is expected to raise its short-term policy rate to 1% from 0.75% at next week's meeting. The article, published by The Business Times on June 12, 2026, cites unnamed sources familiar with the BOJ's deliberations. This potential policy shift signals a cautious approach to monetary normalization amid ongoing economic considerations in Japan.
The Business TimesBank of Japan to consider pausing bond taper next fiscal year, sources say
The Bank of Japan (BOJ) is expected to raise its short-term policy rate to 1% from 0.75% at its upcoming June 15-16 meeting, according to sources. Additionally, the central bank will consider pausing its bond taper program in the next fiscal year, which runs through March 2027. At the meeting, the BOJ will review its current bond taper plan and lay out a new strategy. The potential pause in bond tapering signals a shift in monetary policy normalization pace, as the BOJ balances inflation control with economic stability. The report, published by The Business Times on June 12, 2026, cites unnamed sources familiar with the central bank's deliberations.
The Business TimesBank of Japan Poised to Raise Rates to 31-Year High
The Bank of Japan is expected to raise its policy rate to 1% at its upcoming two-day meeting, marking the highest level since 1995 and its first increase since last December. The move is driven by surging energy prices from the Middle East conflict, persistent yen weakness, and building inflationary pressures. Policymakers aim to ease strain on the yen and adjust deeply negative real interest rates, though the decision risks slowing economic growth. Market trust is a concern, with some investors doubting the BOJ's independence amid perceived political pressure from Prime Minister Sanae Takaichi. Governor Kazuo Ueda has been hospitalized and will miss the meeting, but Deputy Governor Shinichi Uchida is expected to maintain the bank's tightening stance.
Yahoo FinanceBank of Japan set to hike rates to 31-year high, drop hawkish signals
The Bank of Japan (BOJ) is expected to raise interest rates to a 31-year high, aligning with a global trend of central banks tightening monetary policy. The decision comes amid an energy shock, rising import costs driven by a weak yen, and a tight labour market that are fueling inflation risks. The BOJ will likely stress its resolve to continue raising rates to address these pressures. The move marks a significant shift for Japan, which has long maintained ultra-loose monetary policy.
The Business TimesBank of Japan to consider pausing bond taper next fiscal year: sources
The Bank of Japan (BOJ) is considering pausing its bond tapering program in the next fiscal year, according to sources. At its upcoming June 15-16 meeting, the BOJ is expected to raise its short-term policy rate from 0.75% to 1%. The central bank will also review its current bond taper plan, which runs through March next year, and outline a new plan for fiscal 2027 and beyond. The potential pause signals a shift in monetary policy as the BOJ assesses economic conditions and market stability.
The Business TimesBank of Japan to consider pausing bond taper next fiscal year: sources
According to sources, the Bank of Japan (BOJ) is expected to consider pausing its bond taper program in the next fiscal year. At its upcoming June 15-16 meeting, the BOJ will review the current bond taper plan, which runs through March next year, and outline a new plan for fiscal 2027. Additionally, the central bank is anticipated to raise its short-term policy rate from 0.75% to 1% at next week's meeting. The report, published by The Business Times Singapore on June 9, 2026, indicates a potential shift in Japan's monetary policy normalization trajectory as the BOJ balances inflation control with market stability.
The Business TimesBOJ expected to raise interest rates in June: sources
The Bank of Japan (BOJ) is expected to raise its short-term policy rate to 1% from 0.75% in June, according to sources. Markets are pricing in an 80% probability of this rate hike. The move is driven by a spike in wholesale inflation that has alarmed policymakers over the fast pace at which companies are passing on costs. The article, published by The Business Times Singapore on June 4, 2026, indicates the BOJ is continuing its monetary tightening cycle amid persistent inflationary pressures in Japan.
The Business TimesBOJ expected to raise interest rates in June: sources
The Bank of Japan (BOJ) is expected to raise its short-term policy rate to 1% from 0.75% in June, according to sources. Markets are pricing in an 80% probability of this rate hike. The move is driven by a spike in wholesale inflation that has alarmed policymakers over the fast pace at which companies are passing on costs to consumers. The article, published by The Business Times Singapore on June 4, 2026, indicates that the BOJ is moving to tighten monetary policy further as inflationary pressures persist in the Japanese economy.
The Business Times