Bank of Japan Raises Rates to 1.0%, Ending Three Decades of Ultra-Loose Policy

The Bank of Japan raised its benchmark rate to 1.0% on June 16, 2026, the highest level in 15 years. The move concludes a three-decade era of near-zero rates implemented after the 2008 financial crisis. Governor Kazuo Ueda has signaled additional hikes toward 1.25% by year-end, framing the gradual normalization as data-dependent. The shift reshapes cross-border capital flows and pressures Japanese institutions holding foreign bonds.