Jun 16, 2026 – 5.33pmTokyo | The Bank of Japan has raised its short-term policy rate to “around 1 per cent”, taking the cost of borrowing to its highest level in 31 years as the country adjusts to sustained inflation.The 0.25 percentage point rise, which was widely expected, takes Japan to what analysts said was a critical milestone in the central bank’s effort of normalising monetary policy after years of ultra-low interest rates and deflation.Financial TimesSubscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? Fetching latest articles