The Bank of Japan raised its benchmark interest rate by 25 basis points to 0.75 percent, marking the highest level since 1995. The decision aims to address persistent inflation pressures in the economy.
According to details received by The Chenab Times, the policy rate increase from 0.5 percent to 0.75 percent came during the central bank’s final meeting of the year. CNBC reported that the move was in line with market expectations and reflects ongoing efforts to normalize monetary policy after decades of ultra-low rates.
Bank of Japan Governor Kazuo Ueda stated the adjustment supports sustainable wage growth and stable prices. Reuters noted the benchmark 10-year Japanese government bond yield rose to 2.0 percent, its highest since May 2006, following the announcement.
The hike is the first since January and signals potential for further increases if inflation remains above the 2 percent target. BBC reported that core consumer prices rose 2.7 percent in November, exceeding forecasts and fueling cost-of-living concerns.
Analysts anticipate impacts on global markets, including a stronger yen and reduced carry trade activities. The New York Times highlighted that while Japan’s rate remains low compared to other major economies, the shift could influence borrowing costs and investment flows.
Wall Street Journal emphasized the bank’s response to sticky inflation amid a weakening yen. No immediate changes to quantitative easing were announced. The decision takes effect immediately, with the next meeting scheduled for January.
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Global Affairs Desk at The Chenab Times covers international developments, global diplomacy, and foreign policy issues through fact-based reporting, explainers, and analytical pieces. The desk focuses on major geopolitical events, diplomatic engagements, and international trends, with an emphasis on verified information, multiple perspectives, and contextual understanding of global affairs.
