Japan's Bank of Japan raised interest rates in March 2024, ending years of negative monetary policy. Despite initial inflation, the central bank is now navigating continued inflationary pressures.

In March 2024, the Bank of Japan raised interest rates for the first time since 2007, lifting borrowing costs out of negative territory and calling time on decades of ultra-loose monetary policy as Japan emerged from a long period of entrenched deflation. At the time, inflation had been above the central bank’s 2 per cent target for 22 months. Fast forward to today, and inflationary pressures continue to build. Although headline inflation fell to 1.3 per cent in February, this was because of the...