Bank of Japan Raises Rates Again, Yen Strengthens
Japanese central bank continues normalization with second rate hike this year, sending yen to strongest level against dollar since 2023.
The Bank of Japan has raised its benchmark interest rate by 25 basis points to 0.75%, marking its second increase this year as the central bank continues to normalize monetary policy after decades of ultra-low rates.
The yen surged more than 2% against the dollar following the announcement, reaching its strongest level since mid-2023. Japanese government bond yields also rose sharply.
"Japan's era of extreme monetary accommodation is definitively ending," said a currency strategist. "This has major implications for global capital flows."
BOJ Governor Kazuo Ueda indicated that further rate increases are likely if inflation remains at or above the 2% target, as currently expected.
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