Bank of Japan lifts rate to 1%, ending another layer of ultra-cheap money

Published by Albis · 18 Jun 2026

Japan’s central bank raised its short-term policy rate to 1%, the highest since 1995, tightening policy as inflation, oil prices and yen weakness keep pressure on households, borrowers and markets

• • Japan’s policy normalization affects exchange rates, capital allocation, and inflation transmission well beyond its own borders.
• • Price and financing pressure.
• • The Bank of Japan raised its short-term policy rate from 0.75% to 1% at a two-day meeting that ended Tuesday, according to UPI, citing the Yomiuri Shimbun.
• • The rate is Japan’s highest since 1995 and marks another step away from decades of ultra-low borrowing costs.