US EditionBank of Japan raises rates to highest in 30 years as inflation stays above target
The Bank of Japan raised rates to 0.75% to curb inflation above its 2% target, marking the first increase in 17 years and the highest level since 1995, officials said.
- On Nov. 21, 2025, the Bank of Japan raised its policy rate to a three-decade high, the highest level since 1995, Kazuo Ueda, BOJ Governor, said at a lower-house committee.
- Persistent inflation has meant inflation has stayed above the BOJ's 2% target for 44 months, with November consumer price growth at 2.9%, prompting gradual rate lifts to secure the 'virtuous cycle' policy aim.
- Revised GDP and wages data show a 0.6% quarter-on-quarter contraction and 2.3% annualized decline, with real wages falling for 10 months while Japanese government bond yields hit multi-decade highs amid a near 230% debt-to-GDP ratio.
- Analysts including Shigeto Nagai see the BOJ likely raising its policy rate toward a 1% terminal rate by mid-2026, and Japan's cabinet approved a 21.3 trillion yen stimulus to support consumers.
- The move risks friction with Sanae Takaichi, Prime Minister of Japan, as policy normalization began last year and inflation may fall toward 2% in the first half of 2026.
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166 Articles
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Central banks in big economies are signalling a change of stance as the Bank of Japan raised interest rates to a 30-year high on Friday. The Swiss National Bank left its policy interest rate unchanged at 0% on December 11, the lowest among developed-market central banks. The Bank of Canada held its key rate at 2.25% last week, after 225 basis points of easing this cycle. Governor Tiff Macklem said the economy was proving resilient to US trade me…
The Bank of Japan raised its benchmark interest rate by a quarter point in the early morning of Friday to 0.75%, the highest level in 30 years, and anticipated that more increases are likely to come. As the price of money increased, the returns on Japanese government bonds rose after the decision, with the return of the bonus to 10 years exceeding 2% and reaching its highest level since 1999.Keep reading...
The Japanese central bank raised the key rate from 0.5 to 0.75 percent.
The Bank of Japan has taken a turn in its monetary policy. The central bank has raised short-term interest rates to 0.75%, an increase of 25 basis points over the previous 0.5% and the highest level since 1995. This is the first increase in rates it has implemented since January of this year and consolidates the upward cycle begun in 2024.
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The Bank of Japan increased interest rates to levels never seen in three decades and pointed out its willingness to further increases, taking another historic step to put an end to decades of massive monetary support and near-zero borrowing costs. The measure underlines the central bank’s conviction that Japan is on track to achieve its 2% inflation target, backed by rising wages, on a stable basis, and that it is prepared to continue the normal…
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