At its monetary policy meeting that began on the 17th, the Bank of Japan is set to raise its policy rate from the current 1% to 1.25%. The move responds to growing upside risks to prices from higher crude oil prices and the yen's continued depreciation. It is the first rate hike in three months, following June this year, and the shortest interval in the normalization process pursued since the end of large-scale monetary easing in March 2024. A policy rate of 1.25% would be the highest level since April 1995, about 31 years ago. With crude oil futures trading above 100 dollars a barrel amid renewed tensions in the Middle East and inflationary pressure intensifying worldwide, the US Federal Reserve and the European Central Bank also decided on 0.25% rate hikes at their meetings this month, putting major central banks in step with one another.
