Bank of Japan raises rates to highest since 1995 - Financial Times

The Bank of Japan has raised its policy rate to the highest level since 1995, according to the Financial Times, marking another step away from the ultra-loose monetary stance that defined Japanese policy for decades. The move reflects the central bank's evolving assessment of domestic inflation and wage growth, though the report does not specify the exact new rate level.

For global markets, the decision matters beyond Japan. Higher Japanese yields can influence the yen's value, government bond markets and cross-border capital flows, particularly given Japan's long-standing role as a source of low-cost funding for international investors. Even modest rate shifts in Tokyo can ripple through currency and fixed-income markets worldwide.

What to watch: the pace of any further tightening, the yen's reaction, and whether Japanese government bond yields continue to rise. Commentary from the Bank of Japan on inflation sustainability and wage trends will also shape expectations. For now, the hike signals a gradual normalisation — a notable shift for the world's third-largest economy.