Japan Joins the World in Hiking Interest Rates. It Doesn’t Tame Yen’s Slide or Carry Trade Concerns.

The Bank of Japan joined the global rate hiking race on Tuesday with a policy decision that lifted its benchmark lending level to the highest in more than three decades as the spillover impact from the U.S. war with Iran continues to affect major economies around the world. The Bank lifted its key lending rate by 25 basis points, taking it to 1%, in a meeting that citing inflationary pressures linked to the spring surge in global crude prices, which lurched past $114 a barrel in early May and remain more than $10 a barrel higher than prewar levels despite hopes of a peace agreement between Washington and Tehran. The European Central Bank lifted its key lending rate for the first time in three years last week, taking it to 2.25%, with recent tightening also from the Reserve Bank of Australia and Denmark’s Nationalbank.