The Bank of Japan has increased its policy rate to 1%, a 31-year high, to combat inflation driven by rising oil costs. This move occurs despite recent falls in oil prices and a four-year low in Japan's core inflation, as policymakers aim to stabilize underlying inflation near their 2% target.
The Bank of Japan raised its policy rate to 1%, the highest in over 30 years, to combat creeping inflation and a weak yen. This marks the first rate hike since December and the first time rates have reached 1% since 1995. The decision, supported by a 7-1 vote, signals a focus on inflation concerns over growth.
The Bank of Japan raised its policy rate to 1%, the highest in over 30 years, in a move to normalize policy amid a weak yen and rising inflation. This marks the first rate hike since December and the first time rates have reached 1% since 1995.
ING Global expects the Central Bank of the Republic of Turkey (CBRT) to maintain its policy rate at 37%. However, it notes a potential hike to around 40% if geopolitical and domestic political risks increase. The bank also revised its year-end USD/TL forecast to 53.00.
Indonesia's central bank unexpectedly raised its policy rate by 25 basis points to 5.5% to stabilize the rupiah, which hit a record low of 18,190 against the USD, and to keep inflation within the 1.5%-3.5% target range for 2026-2027.
The Reserve Bank of India (RBI) has introduced measures to attract foreign currency inflows, including incentives for external commercial borrowings (ECBs) and bearing hedging costs on FCNR(B) deposits, while maintaining the policy rate at 5.25% and a neutral stance. RBI also revised its inflation forecast upward to 5.1% and lowered growth forecasts to 6.6% for FY27, citing supply chain disruptions and elevated energy prices.
The Reserve Bank of India (RBI) has kept its key policy rate unchanged at 5.25% due to cautious concerns over the impact of the West Asia conflict on inflation and economic growth, while announcing measures to attract dollar inflows and stabilize the economy.
Bank of Japan held its policy rate at 0.75% in a split 6-3 vote, revising inflation forecasts upward to 2.8% due to Iran war supply-side risks while cutting its 2026 growth forecast to 0.5%. The central bank warned that rising crude oil prices from the Middle East crisis would crimp corporate profits and real household incomes. Japan narrowly avoided a technical recession in Q4 2025, with 0.3% QoQ and 1.3% YoY growth. The 10-year bond yield hit 2.496% on April 13, the highest since 1997.
