The market expected a 25 basis point rate hike to 1.25% after earlier decisions to tighten borrowing costs were made by the European and US central banks. Banks face increasing pressure to tighten monetary policy as the oil price surge caused by the Middle East crisis – with no signs of it ending soon – continues to exert inflationary pressure.
Read more Pipe broke or neighbors damaged: who pays for the damage – tenant or owner?
“Given that core inflation is approaching 2% and financial conditions are favorable, the bank will continue to raise base interest rates,” the Bank of Japan’s website states.
