The Guardian16 Jun 2026Macro
Automatically composed with AI from the cited sources
The Bank of Japan raised its short-term policy rate by a quarter of a percentage point, from 0.75% to 1%, the highest borrowing cost since 1995. The decision came despite annual core inflation falling to a four-year low of 1.4% in April and a recent drop in oil prices following a US-Iran memorandum on a peace deal. Governor Shinichi Uchida said the risk of a sharp economic deterioration had diminished while underlying inflation was approaching 2%, and that price rises were broadening. The Nikkei 225 closed at a record high, topping 70,000 points for the first time. The BoJ is the second G7 central bank to tighten since the Iran war began, after the European Central Bank last week.