Bank of Japan lifts rates by 25bps to 1%, delays bond taper until April 2027, citing inflation overshoot concerns.
The Bank of Japan raised its benchmark rate by 25 basis points to 1%, marking the highest level in 31 years. The decision, widely anticipated, included a pause in bond tapering until April 2027 and highlighted risks of inflation exceeding targets.
Prior to the move, markets had priced in the hike, with consensus expecting a split vote. The BOJ’s signals for future policy shifts, including potential July adjustments, drew attention amid a fragile global outlook shaped by the Iran-Hormuz deal.
Japanese government bonds remained steady, while the Nikkei retreated slightly from record highs ahead of the announcement.