{"text":[[{"start":9.95,"text":"The Bank of Japan has raised its short-term policy rate to “around 1 per cent”, taking the cost of borrowing to its highest level in 31 years as the country adjusts to sustained inflation. "}],[{"start":20.9,"text":"The 0.25 percentage point increase, which was widely expected, takes Japan to what analysts said was a critical milestone in the central bank’s effort of normalising monetary policy after years of ultra-low interest rates and deflation."}],[{"start":35.65,"text":"The BoJ’s policy rate was last at 1 per cent in 1995, when the central bank was in the process of lowering borrowing costs in the wake of the Japanese asset bubble burst in the late 1980s. "}],[{"start":49.349999999999994,"text":"In a statement accompanying the decision, the BoJ signalled that it intended to continue that normalisation process, raising the policy interest rate and degree of monetary accommodation “in response to developments in economic activity and prices as well as financial conditions”."}],[{"start":66.64999999999999,"text":"The BoJ also said that from April 2027 it would stop reducing its monthly purchases of Japanese government bonds, levelling off at a pace of about ¥2tn of monthly purchases. That move was also widely expected by the market."}],[{"start":81.1,"text":"The yen held steady at about ¥160.2 versus the dollar following the announcement."}],[{"start":null,"text":"
"}],[{"start":88,"text":"The BoJ said that while higher crude oil prices were weighing on economic activity, “the risk of a significant slowdown in the economy appears to have decreased compared with a while ago”. "}],[{"start":98.6,"text":"It also noted that the price pass-through from higher fuel prices had been progressing relatively quickly, and could spread from business-to-business transactions to push underlying consumer price inflation above its target of 2 per cent."}],[{"start":111.94999999999999,"text":"Since lifting Japan out of negative interest rates in 2024, the BoJ raised rates twice in 2025. It has been expected to settle into a pattern of gradually tightening every six months or so. Some economists believe a further 0.25 percentage point rise could come as soon as October."}],[{"start":133.35,"text":"This week’s decision to raise interest rates this week was reached by a 7-1 vote of the bank’s Monetary Policy Committee, which was down to eight members after governor Kazuo Ueda was admitted to hospital last week."}],[{"start":146.04999999999998,"text":"The dissenting member, Toichiro Asada, argued that the situation in the Middle East presented Japan with greater downside risks to production and employment than the upside risks to prices."}],[{"start":158.64999999999998,"text":"“The distribution of votes is interesting and reflects that the board is a bit more balanced now when previously it skewed comfortably hawkish,” said Stefan Angrick, head of Japan at Moody’s Analytics."}],[{"start":169.54999999999998,"text":"“The fact is also that the BoJ has no good choices,” he added. “They can hike to stem inflationary pressure by strengthening the yen, but that would hurt the economy.”"}],[{"start":179.24999999999997,"text":"Ueda is receiving treatment for a liver condition and did not attend the meeting or cast a vote. He is expected to return for the July meeting. This week’s meeting was chaired by one of the BoJ’s deputy governors, Ryozo Himino."}],[{"start":192.29999999999998,"text":"The afternoon press conference will be led by the bank’s other deputy governor, Shinichi Uchida, whose comments will be closely scrutinised for signs of how the BoJ will continue to assess the negative economic impact of the Iran war."}],[{"start":206.24999999999997,"text":"Data visualisation by Haohsiang Ko in Hong Kong"}],[{"start":218.64999999999998,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1781585674_9375.mp3"}