Bank of Japan raises interest rates to 31-year high … of 1%

The Bank of Japan (BoJ) raised its short-term policy rate by 0.25 percentage points to 1% on June 16, 2026, marking the highest interest rate in 31 years. This decision was made to combat inflationary pressures exacerbated by the ongoing Iran war. The BoJ noted that companies are rapidly passing on increased oil costs to consumers and other businesses. This move contrasts with expectations for the US Federal Reserve and the Bank of England, which are anticipated to maintain their current interest rates. The BoJ's action signals a significant shift in its monetary policy aimed at stabilizing the economy amidst global inflationary challenges.