TOKYO — Japan’s central bank took a significant step Tuesday, pushing its short-term interest rate to the highest point in more than three decades in a move that financial markets had widely anticipated.
The Bank of Japan concluded a two-day policy meeting by voting 7-1 to raise its benchmark rate from 0.75% to 1.0%. The increase brings the rate to a level not seen since 1995 and marks the bank’s first rate hike since December.
Officials signaled that the decision reflects the central bank’s concern about inflation risks stemming from the ongoing conflict in the Middle East.
Governor Kazuo Ueda was absent from the meeting, as he is currently hospitalized for medical treatment and did not cast a vote. Deputy Governor Shinichi Uchida is scheduled to hold a news briefing at 3:30 p.m. local time (0630 GMT) on Ueda’s behalf to outline the reasoning behind the policy change.
