Bank of Japan lifts rate to 1%, highest level since 1995
What's new: The 7-1 move pushed the Nikkei to a record above 70,000, lifted the yen and paused bond-tapering from April.
The Bank of Japan raised its short-term policy rate to 1% from 0.75% on Tuesday, taking borrowing costs to their highest level since 1995 as officials moved to contain inflation linked to higher energy prices. The board approved the step by a 7-1 vote. Board member Toichiro Asada dissented, arguing the Middle East conflict posed bigger risks to growth than to prices. Gov. Kazuo Ueda did not attend and did not vote because he is undergoing two weeks of hospital treatment for an infected liver cyst. The BOJ also decided to pause its bond-taper program from April and keep buying roughly 2 trillion yen a month in Japanese government bonds. After the decision, the Nikkei 225 rose as much as 1% to a record above 70,000, the yen strengthened and the 10-year JGB yield climbed.