Bank of Japan raises rates to 1% for first time since 1995

The Bank of Japan raised its key interest rate to 1% on March 19, 2024, marking the first such increase since 1995. This decision signals a significant shift in the central bank's long-standing ultra-loose monetary policy, which has been in place for over a decade. The move comes as the bank assesses the sustainability of its inflation targets and the broader economic outlook. Deputy Governor Shinichi Uchida is scheduled to lead the press conference following the policy announcement, as Governor Kazuo Ueda was hospitalized last week. The bank's monetary policy board voted to end its negative interest rate policy and yield curve control, a move that has been anticipated by markets for some time. This policy shift is expected to influence borrowing costs for businesses and consumers across Japan, potentially impacting investment and spending decisions. The Bank of Japan's decision is closely watched by global financial markets, given Japan's position as the world's third-largest economy.