BOJ Raises Interest Rate to Combat Inflation

The Bank of Japan (BOJ) has made another move to combat inflation by raising its key interest rate from 1% to 1.25%. This change, announced on Friday, September 18, is a response to higher global oil prices and the depreciation of the yen over several years.

This marks the highest interest rate since 1995, making it one of the most significant monetary policy decisions in recent times for Japan's economy.

BOJ began its policy of raising interest rates back in March 2024, when the target policy rate was elevated to 0-0.1% from minus 0.1%. Since then, there have been several incremental increases, with the previous change putting the key interest rate at 1% in June.

The yen's depreciation and higher oil prices have contributed to Japan's inflation woes, prompting BOJ to take this decisive step.