Japan’s central bank raised its key interest rate from 1% to 1.25%, the highest level since 1995, as it continues to move away from decades of ultra-low borrowing costs.

INTELLIGENCE SUMMARY

Japan’s central bank raised its key interest rate from 1% to 1.25%, the highest level since 1995, as it continues to move away from decades of ultra-low borrowing costs. The Bank of Japan has raised rates six times since 2024 to tackle inflation pressures, including rising energy costs linked to disruptions from the Iran war. Japan is also dealing with a weak yen, higher prices and a shrinking workforce.