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 traded near 160.23 per U.S. dollar.
- A preliminary Middle East peace deal was announced by U.S. President Donald Trump.
- The dollar index fell to near 10-day lows.
- Oil prices declined following the peace deal announcement.
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 traded near 160.23 against the U.S. dollar.
Asian stocks saw modest gains as initial excitement over a preliminary U.S.-Iran peace deal began to fade, while oil prices slipped. The dollar index held near 10-day lows. Investors are also awaiting decisions from the Bank of England and the U.S. Federal Reserve.
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. The 7-1 vote split on the rate hike suggests some uncertainty regarding the timing of future increases.