The Japanese national flag flutters at the Bank of Japan (BOJ) headquarters in Tokyo, Japan, 16 June 2026. The BOJ decided to raise its key policy interest rate from the current 0.75 percent to 1.0 percent, marking the highest interest-rate level since September 1995. Photo by FRANCK ROBICHON / EPA
June 17 (Asia Today) -- The Bank of Japan's decision to raise its policy rate to 1% for the first time in 31 years is expected to benefit older households with substantial savings while increasing pressure on younger mortgage borrowers and debt-dependent small businesses.
The shift could also affect South Korean companies operating in Japan through exchange rates, financing costs and changes in Japanese consumer demand.
The central bank raised its short-term policy rate from 0.75% to 1% at a two-day monetary policy meeting that ended Tuesday, the Yomiuri Shimbun reported.
The rate is the highest since 1995 and marks another step in Japan's transition away from decades of ultra-low borrowing costs.
