Bank of Japan Raises Interest Rates to Highest Level Since 1995

Rising inflation and higher energy costs prompted Bank of Japan policymakers to lift borrowing costs.

A passerby walks past the Bank of Japan headquarters in Tokyo, Japan, on Jan. 23, 2025. Issei Kato/Reuters

Japan’s central bank raised its benchmark interest rate to the highest level in more than three decades on June 16, citing broadening inflation pressures and rising energy costs.

The Bank of Japan (BOJ) voted 7–1 to raise its policy rate to around 1 percent from 0.75 percent, marking the highest benchmark interest rate since 1995. The new rate takes effect on June 17.