Bank of Japan raises rates to 31-year high of 1.25% as inflation rises

Bank of Japan raises benchmark interest rate from 1 to 1.25 percent, pledging to help counter inflation risks.

A man walks in front of an electronic quotation board displaying the Nikkei 225 stock prices on the Tokyo Stock Exchange in Tokyo [File: Kazuhiro Nogi/AFP]

The Bank of Japan (BoJ) has raised interest rates by 0.25 to 1.25 percent, pushing borrowing costs to their highest level in 31 years, amid rising inflation and wages, and pressure from Washington.

The move on Friday marked the first hike since June, and takes interest rates closer to levels the BoJ deems neutral to the economy, marking another step away from decades of ultra-low rates that cemented the yen’s status as a cheap global funding currency.

Japan is grappling to contain inflation, which is being driven by factors including rising energy prices, global supply pressures and domestic inflation exceeding the 2 percent target.

Core consumer inflation held steady near the target in August, data showed on Friday, as companies continued to pass on rising costs for a wide range of food and grocery items.

The country also faced a “slow-moving demographic shock” with a shrinking labour pool lifting wages, a structural factor that ⁠cannot be dismissed as temporary, BoJ Executive Director Koji Nakamura said on Monday.

The Federal Reserve’s rate hike on Wednesday, and the prospect of another one later this year, have added pressure on the BoJ to keep pace.

Further widening of the United States-Japan rate gap risks weakening the yen and lifting inflation through higher import costs, analysts told the Reuters news agency.

Its policy rate also remains lower than the European Central Bank, which raised its key rate to 2.5 percent last week.

Such pressure could affect the tone of BoJ Governor Kazuo Ueda’s post-meeting briefing, which will be closely watched by markets for clues on the timing and pace of further increases.

日本央行将基准利率从1%上调至1.25%，承诺帮助应对通胀风险。

一名男子走过东京证券交易所的电子报价板，该报价板显示着日经225指数的股价。[图片：Kazuhiro Nogi/AFP]

由于通货膨胀和工资上涨，以及来自华盛顿的压力，日本央行将利率上调了0.25%至1.25%，将借贷成本推至31年来的最高水平。

周五的加息标志着自 6 月以来的首次加息，并将利率提高到日本央行认为对经济中性的水平，这标志着日元距离数十年来巩固其作为廉价全球融资货币地位的超低利率又近了一步。

日本正努力控制通胀，通胀是由能源价格上涨、全球供应压力以及国内通胀率超过 2% 的目标等因素造成的。

周五公布的数据显示，8月份核心消费者通胀率稳定在目标附近，原因是企业继续将各种食品和杂货成本的上涨转嫁给消费者。

日本央行执行董事中村浩二周一表示，该国还面临着“缓慢发生的人口冲击”，劳动力萎缩推高了工资，这是一个不能被视为暂时性的结构性因素。

美联储周三加息，以及今年晚些时候可能再次加息的前景，给日本央行带来了更大的压力，迫使其跟上美联储的步伐。

分析人士告诉路透社，美日利率差距进一步扩大有可能导致日元走弱，并通过增加进口成本推高通胀。

其政策利率也仍然低于欧洲中央银行，后者上周将基准利率上调至 2.5%。

这种压力可能会影响日本央行行长上田一夫会后简报的基调，市场将密切关注此次简报，以从中寻找进一步加息的时机和速度的线索。