Story perspectives

BOJ lifts rate to 1% amid slowing inflation.

6/20/2026

Summary

BOJ Raises Rates

The Bank of Japan lifted its short-term policy rate to 1 percent, a 31-year high, on Tuesday.
Analyst Sakurai expects the BOJ to raise rates twice by March 2027 and reach about 2 percent by early 2028.
May inflation measures showed core CPI up 1.4 percent YoY and core-core CPI (excluding food and fuel) up 1.8 percent, the slowest since Sep 2022.
Wholesale inflation hit 6.3 percent in May, a three-year high driven by energy costs.

Summary

Himino warns inflation

Himino warned that the yen’s slide to 161.20 per dollar, lowest since 1986, is boosting inflation via faster corporate price pass-through.
Himino said the USD/JPY rise to 161.80 shows foreign-exchange moves are feeding consumer prices faster.
Himino linked the Middle East conflict to higher import energy costs that could lift consumer inflation this summer.
Himino cautioned that delaying hikes may force faster future increases, raising mortgage costs and burdening households.

History

Historical Context

After the 1995 Great Hanshin earthquake pushed the yen to about 80 yen per dollar, the Bank of Japan cut its policy rate to 0.5 % and in 1999 adopted a zero-interest stance. The March 2024 increase to 1 % mirrors that shift, with the yen again near 161 yen per dollar, reviving inflation concerns.

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BOJ Raises Rates

The Bank of Japan lifted its short-term policy rate to 1 percent, a 31-year high, on Tuesday.
Analyst Sakurai expects the BOJ to raise rates twice by March 2027 and reach about 2 percent by early 2028.
May inflation measures showed core CPI up 1.4 percent YoY and core-core CPI (excluding food and fuel) up 1.8 percent, the slowest since Sep 2022.
Wholesale inflation hit 6.3 percent in May, a three-year high driven by energy costs.

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