Bank of Japan hikes rates to highest since 1995 as yen languishes at historic lows

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   BOJ hikes rates to 1995 high as yen weakens; traders brace for further moves

   The Bank of Japan raised its benchmark interest rate to 1%—its highest level since 1995—marking a major shift from decades of ultra-low borrowing costs. The yen remains near historic lows, and markets are watching for signals on future hikes. Bitcoin traders are monitoring the move due to elevated yen short positions. The decision follows a split vote and pauses on bond tapering, with July guidance under scrutiny.

   What's confirmed:

   • The Bank of Japan raised its benchmark interest rate to 1%, the highest level since 1995, in a landmark policy shift.
   • This is the BOJ's first rate hike since December 2025, when it raised rates to 0.75%, also its highest level in over 30 years.
   • The yen remains under pressure, with short positions at a nine-year high, drawing attention from Bitcoin traders.
   • The BOJ’s move signals readiness for further rate increases, though internal votes were split on the decision.
   • The decision includes a pause on bond tapering, with July signals now critical for market expectations.
   • The U.S. dollar has moved to near 10-day lows, offering no immediate relief to the yen after the BOJ’s hike.

   Still unconfirmed:

   • Traders are betting the yen will weaken further, reviving the yen carry trade as the BOJ normalizes policy.
   • BOJ Policy Architect Uchida will provide key guidance on future rate paths, though specifics remain unclear.
   confidence 95%