Japan raises interest rates | Economic News

The Bank of Japan (BoJ) raised its policy rate to 0.25 percent.

The BOJ announced its decisions after a two-day monetary policy meeting.

Accordingly, short-term interest rates were increased by 15 basis points to 0.25 percent. It was decided to reduce government bond purchases.

The decision was made by majority vote. Monthly JGB (Japanese Government Bond) purchases will be reduced to 3 trillion yen from January to March 2026, and the amount will be reduced by 400 billion yen each quarter.

The statement said that economic activity and prices in the country have generally developed in line with those presented in the previous Economic Activity and Prices Outlook.

According to the BOJ’s forecasts for the upcoming period, the core consumer inflation forecast, which is expected to be 1.9 percent by the end of the year, has not changed.

The bank forecast that Japan’s economy will expand 0.6 percent in the current year, compared with 0.8 percent growth projected in its previous report. It also maintained forecasts that the country will grow 1 percent in both 2025 and 2026.