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BOJ raises interest rates to 31-year high in widely expected move

BY Reuters | ECONOMIC | 06/15/26 11:29 PM EDT

TOKYO, June 16 (Reuters) - The Bank of Japan raised interest rates to a 31-year high on Tuesday, a widely expected move that signalled its focus on countering inflation risks from the Middle East conflict.

At a two-day meeting that ended on Tuesday, the central bank decided to raise its short-term policy rate to 1.0% from 0.75% by a 7-1 vote.

It was the first rate increase since December and brought the BOJ's policy rate to levels unseen since 1995.

Governor Kazuo Ueda, who is hospitalised for a medical treatment, missed the meeting and did not vote. Deputy Governor Shinichi Uchida will hold a news briefing on Ueda's behalf at 3:30 p.m. (0630 GMT) to explain the policy decision.

(Reporting by Leika Kihara, Makiko Yamazaki, Kantaro Komiya and Satoshi SugiyamaEditing by Chang-Ran Kim)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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