Key facts
- The Bank of Japan increased its policy rate to 1.0% from 0.75%.
- This is the highest interest rate the BOJ has set since 1995.
- The yen edged up to 160.215 against the dollar.
- Asian stocks showed cautious gains, while oil prices slipped.
- A preliminary agreement between Washington and Tehran was announced.
The Bank of Japan raised its benchmark policy rate to 1.0% from 0.75%, marking its first increase since December and reaching the highest level since 1995. This move was widely expected and aims to address inflation risks. The Japanese yen edged up to 160.215 against the U.S. dollar. Asian stocks made cautious gains as initial excitement over a preliminary U.S.-Iran peace deal began to fade, while oil prices slipped. Investors are also awaiting a decision from the Reserve Bank of Australia, expected to pause its tightening cycle.
Overnight, Wall Street stocks and bonds rallied on optimism over the Iran deal. The U.S. dollar index held steady. Bank of Japan Deputy Governor Shinichi Uchida is scheduled to hold a press briefing to explain the central bank's decision, as Governor Kazuo Ueda is undergoing medical treatment.