TOKYO – The Bank of Japan (BOJ) decided Tuesday at its two-day monetary policy meeting to raise its benchmark interest rate to 1.0 percent from 0.75 percent, the highest in 31 years.

BOJ Governor Kazuo Ueda, who has been hospitalized for treatment of a hepatic cyst infection, missed the meeting, at which the remaining board members decided to take the short-term interest rate to levels unseen since 1995.

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The decision marked the first rate hike since December 2025, as the BOJ tackles growing inflation risks from elevated crude oil prices due to the Middle East conflict and the weak yen. The central bank kept the policy rate steady at the three previous sessions.