BOJ Decides to Raise Policy Rate to 31-Year High of 1 Pct

Tokyo, June 16 (Jiji Press)--The Bank of Japan decided Tuesday to raise its policy interest rate from around 0.75 pct to around 1 pct, a level unseen in about 31 years, amid concerns over inflation driven by high oil prices linked to the situation in the Middle East.

At a two-day meeting that ended on the day, the BOJ's Policy Board voted seven to one to raise its policy interest rate to the highest level since September 1995. The new rate will take effect on Wednesday.

This marks the Japanese central bank's first policy rate hike since December last year, following three consecutive policy-setting meetings at which the rate was left unchanged.

BOJ Governor Kazuo Ueda, currently hospitalized for treatment of a liver cyst infection, was absent from the latest meeting and did not participate in the vote.

Of the eight BOJ policymakers who attended the meeting, only Toichiro Asada opposed the rate hike, saying that the downside risk to production and employment is greater than the upside risk to prices.

[Copyright The Jiji Press, Ltd.]