Japan’s central bank has increased its main interest rate to a new 31-year high after a surge in global energy prices, the BBC reports.
On Tuesday, the Bank of Japan (BOJ) raised its so-called policy rate to 1% from 0.75% – to a level not seen since 1995.
The decision comes as some other central banks have raised interest rates this year as the Iran war pushed up the cost of living.
Japan’s interest rates were cut aggressively in the 1990s to combat the fallout from a collapse in prices of assets like property and shares. They had been near zero for two decades as prices fell and growth stagnated.
The bank has been gradually raising its rate since March 2024 – at the time it was the country’s first hike in 17 years.
