The Bank of Japan has announced a hike in its benchmark interest rate, moving the target from 1% to 1.25%. This adjustment marks the highest borrowing cost in the country for the first time since 1995.
The decision was made as policymakers seek to mitigate the effects of persistent global inflation, which has been significantly influenced by the ongoing conflict in Iran. The move aligns Japan with broader tightening trends currently being pursued by other major financial institutions, including the US Federal Reserve and the European Central Bank.
A 1.25% rate is still incredibly low by global standards. Don’t get too excited.
Is the connection to the Iran conflict really that strong? Feels like a stretch to me.
Finally, another major central bank joining the tightening party. Why does it take so long?
I hope this doesn’t crush the housing market for young buyers again.