Bank of Japan raises interest rate to 1%, highest since 1995, citing inflation and yen concerns
By
Lim Hui Jie
Kettled twice. Extra chewy, extra trustworthy.
Summary
The Bank of Japan raised its benchmark interest rate to 1%, the highest level since 1995, marking its first hike since December when rates were at 0.75%. The move is driven by yen weakness and inflation concerns. While consumer inflation has remained below 2% partly due to government energy subsidies, the BOJ warned that rising crude oil prices are rapidly passing through business-to-business transactions and could soon spread to broader consumer prices. Japan's producer price index rose 6.3% in May, the fastest pace in over three years, largely fueled by higher energy costs.
Key quotes
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The BOJ said Japan's consumer inflation has been below 2% due to government's measures to reduce the household burden of higher energy prices.
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