Economy
Bank of Japan hikes rates to highest since 1995
The Bank of Japan (BOJ) lifted its key policy rate to a 31-year high on Tuesday as it counters a spike in consumer prices caused by the Middle East war, even as Washington and Tehran agreed on a peace memorandum.
The central bank for the world’s fourth-largest economy raised its benchmark rate 25 basis points to 1.0%, the highest since 1995 and marking the first increase since December.
The widely expected decision followed rate hikes by the European Central Bank (ECB) and in Indonesia last week, after the conflict caused economic havoc and led to rising prices worldwide.
With U.S. inflation at a three-year high, expectations are growing that the Federal Reserve (Fed) will follow suit, albeit not at new boss Kevin Warsh’s first gathering this week.
“While higher crude oil prices have been exerting downward pressure on economic activity, the economy has generally been supported by factors such as high levels of corporate profits and an improvement in the employment and income situation,” the BOJ said.
The consumer price index (CPI) has been below 2%, thanks in part to government energy subsidies.
“However, the price pass-through stemming from the rise in crude oil prices has been progressing at a relatively fast pace in business-to-business transactions, which could spread to an increase in consumer prices across a wide range of items,” the central bank added.
“Against this backdrop, taking into account that medium- to long-term inflation expectations have also continued to rise, there is a risk of underlying CPI inflation deviating upward to a level above the price stability target of two percent.”
Looking ahead, the bank said that it will “continue to raise the policy interest rate and adjust the degree of monetary accommodation.”
“In this regard, it will consider the timing and pace of adjustment, while closely monitoring the impact of the future course of the situation in the Middle East on Japan’s economic activity and prices,” it said.
It also indicated that it would pause the tapering of its colossal program of bond purchases after next April.
U.S.-Iran deal
The U.S. and Iran agreed to end their three-month war on all fronts and reopen the Strait of Hormuz, through which about a fifth of the world’s oil and gas passed prior to the conflict.
The accord was set to be physically signed in Switzerland on Friday, but hundreds of ships remain stuck, and it will likely take considerable time for trade flows to normalize.
Japan relied on the Middle East for around 90% of its crude supplies before the war began on Feb. 28.
Its problems have been exacerbated by a falling yen, caused by the rise in oil prices and the gap between U.S. and Japanese interest rates, which are among the lowest in the developed world.
The government spent around 11.7 trillion yen ($72 billion) last month propping up the currency, which has been languishing at around 160 yen against the dollar.
The yen briefly jumped against the dollar after the announcement on Tuesday, while the Nikkei 225 stock index rose above 70,000 points for the first time.
BOJ deputy governor Shinichi Uchida was slated to address the media on Tuesday afternoon after the rate decision, filling in for governor Kazuo Ueda, who is in hospital.
The central bank is under pressure from markets to keep tightening interest rates, and also from Prime Minister Sanae Takaichi’s government not to snuff out growth with high borrowing costs.
The BOJ began hiking rates from below zero in 2024 after nearly two decades of ultra-loose monetary policies.
Akino Fukuda at Moody’s Analytics said Tuesday’s move was “another step toward policy normalization.”
“Real rates remain negative, financial conditions are still relatively loose, and inflation pressures are turning higher, so more hikes are necessary,” Fukuda said.
“The question now is the pace.”
Türkiye’s five-year credit default swap (CDS), a key gauge of the country’s sovereign risk, fell to 225 basis points on Monday, marking its lowest level since Feb. 26, as easing Middle East tensions lifted investor sentiment and boosted appetite for risk assets.
The decline coincided with a broad rally across global markets following the agreement between Washington and Tehran, which is expected to end months of conflict and pave the way for the reopening of the Strait of Hormuz, one of the world’s most important energy transit routes.
On Sunday, U.S. President Donald Trump announced that an agreement with Iran had been finalized and said he was authorizing the reopening of the Strait of Hormuz and the removal of a U.S. naval blockade.
“The Deal with the Islamic Republic of Iran is now complete. Congratulations to all!” Trump said in a post on his Truth Social platform.
The easing of Middle East tensions supported emerging-market assets, while lower oil prices improved sentiment toward energy-importing economies such as Türkiye.
CDS contracts are widely used by investors to insure against the risk of default on sovereign or corporate debt. A lower CDS level generally indicates reduced perceived credit risk and can support more favorable external borrowing conditions.
Türkiye’s risk premium had come under pressure earlier this year amid heightened regional tensions and concerns over potential energy supply disruptions.
The latest decline signals an improvement in market sentiment, supported by expectations that reduced energy-related risks could ease inflationary pressures and encourage capital flows into emerging markets.
Oil prices fell sharply following the U.S.-Iran agreement, as investors priced in the potential normalization of shipping through the Strait of Hormuz.
The decline in crude prices is particularly significant for Türkiye, which relies heavily on energy imports and is sensitive to movements in global oil and natural gas costs.
The improvement in Türkiye’s CDS also reflected broader optimism across international markets, as investors returned to risk assets following the de-escalation of tensions in the Middle East.
Türkiye’s central government budget posted a deficit of TL 298.2 billion ($6.44 billion) in May, official data showed on Monday.
Budget revenues fell 18% year-over-year to almost TL 1.1 trillion, while expenditures rose 27% to nearly TL 1.4 trillion, according to the Treasury and Finance Ministry.
The primary balance, which excludes interest payments, posted a deficit of TL 169.3 billion in May, compared with a surplus of TL 346.4 billion in the same month last year.
Interest expenditures increased 16% from a year earlier to TL 128.9 billion, while non-interest expenditures rose 28.3% to TL 1.25 trillion.
Tax revenues declined 22.1% in May from a year earlier to TL 931.5 billion.
In the January-May period, the budget deficit stood at nearly TL 1.1 trillion.
Budget revenues rose 33.9% year-over-year to TL 6.28 trillion in the first five months of the year, while expenditures increased 37.4% to TL 7.34 trillion.
Tax revenues rose 32.4% year-over-year to TL 5.3 trillion during the period.
Interest expenditures jumped 51.1% to almost TL 1.3 trillion, while non-interest expenditures increased 34.8% to TL 6.1 trillion.
Libya’s National Oil Corporation (NOC) has signed production-sharing deals with several international energy firms after the country’s first licensing round in nearly 20 years, Chair Massoud Suleman said Monday.
The agreements were signed with Spain’s Repsol and Türkiye’s state-owned Turkish Petroleum Corporation (TPAO), Italy’s Eni and QatarEnergy, and a consortium comprising Hungary’s MOL Group, TPAO and Repsol, Suleman said in a statement posted on social media.
The deals follow Libya’s 2025 bid round, under which the NOC awarded exploration acreage to foreign companies as the Organization of the Petroleum Exporting Countries (OPEC) member seeks to attract investment and raise oil production capacity to 2 million barrels per day from around 1.4 million bpd currently.
Suleman said the agreements reflected growing confidence in Libya’s oil and gas sector and would support exploration, development and production growth.
One of Africa’s biggest oil producers, Libya awarded exploration blocks in February to companies including Chevron, Eni, QatarEnergy, TPAO, and Repsol in its first licensing round since 2007.
Foreign investors have been wary of putting money into Libya, which plunged into chaos since a NATO-backed uprising toppled and killed longtime dictator Moammar Gadhafi in 2011.
It remains divided between the U.N.-recognized government in the west and its eastern rival, backed by military commander Khalifa Haftar.
Disputes between them over oil revenues have often led to oilfield shutdowns and output disruptions.
Fox Corp. has reached an agreement to acquire the streaming pioneer Roku in a cash-and-stock deal valued at approximately $22 billion, including debt, the companies said on Monday.
Roku will continue to be run as an open, partner-friendly platform, the companies said, and there appears to be no immediate changes that customers will see.
Fox and Roku said that the combined company will become the third-largest player in U.S. television by share of viewing.
Media reports had surfaced on Friday that Roku was looking at its strategic options, including a possible sale.
Speculation was rampant as to which companies might be interested in an acquisition. Aside from Fox, names being tossed about as potential buyers included Netflix, Amazon, Comcast and Disney.
The deal will give Fox access to more than 100 million global households, along with the Roku channel and its first-party data. Fox oversees a massive sports, news and entertainment network, as well as Tubi, which it acquired in 2020.
Roku founder Anthony Wood had initially worked within Netflix in the early 2000s as it attempted to make the seismic shift from renting DVDs to streaming.
Roku was spun off by Netflix, however, and the company released its first set-top box in 2008.
Wood, who is Roku’s chairperson and CEO, said his motivation in pursuing the technology was his desire to record and play his favorite show, “Star Trek.”
Fox Corp. CEO Lachlan Murdoch said in a statement that combining the businesses will bring together Fox’s live news and sports content with a streaming platform with a large viewership. It will also give Fox more exposure to advertising and streaming subscriptions.
“The combination with FOX is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively for viewers, partners and advertisers,” Wood said in prepared remarks.
Wood will have an ongoing role at the company and will join the Fox board of directors after the transaction closes.
Murdoch said during a conference call that the combined company will be better positioned for the next decade of video than either company would’ve been alone.
“We are confident this is the right transaction, at the right moment, for all the right reasons,” he said.
Fox will pay $96 in cash and 0.9693 shares of its Class A common stock for each Roku Class A and Class B share outstanding. The transaction is valued at $160 per Roku share.
Existing Fox shareholders are expected to own approximately 73% of the combined company and Roku shareholders will own about 27%, once the deal closes.
The deal is expected to close in the first half of next year. It still needs approval from Fox and Roku shareholders and also regulatory approval.
Fox’s stock declined before the market open while shares of Roku rose slightly.
The European Union has legal grounds to suspend its trade agreement with Israel over serious violations of international law, according to a leaked internal document that could increase pressure on the bloc to take action against Tel Aviv.
The “strictly confidential” document, prepared by the European Commission’s legal service in 2017, concluded that a “total or partial suspension” of the EU-Israel Association Agreement would be consistent with customary international law.
The disclosure comes as EU member states debate taking a tougher stance toward Israeli Prime Minister Benjamin Netanyahu’s government amid ongoing war crimes and other violations of international law in Gaza, the West Bank, and southern Lebanon.
Spain and Ireland have led calls to suspend the association agreement, which grants Israel preferential trade access to the EU market and is viewed as a potential source of leverage over Israeli policy.
Germany, one of Israel’s closest allies in Europe, has so far opposed suspending the agreement. Berlin has questioned the legal basis for such a move and argued that maintaining diplomatic engagement offers a better chance of influencing Israeli policy than punitive measures.
The 2017 legal opinion stated that the EU was entitled to suspend cooperation with Israel over breaches of international law in the West Bank.
It suggested the bloc could exclude Israel from programs such as Horizon Europe research grants and the Erasmus student exchange scheme.
According to the report, the memo also noted that U.N. Security Council Resolution 2334, adopted in 2016, explicitly called on U.N. member states to take measures to prevent acts of destruction in the West Bank.
A total or partial suspension of the EU-Israel Association Agreement “would comply with customary international law,” the memo said.
President Recep Tayyip Erdoğan on Monday inaugurated the newly modernized Ankara Airport, saying 2026 was shaping up to be a “year of summits” for Türkiye.
The former Etimesgut Air Base, which underwent a comprehensive modernization program, has been reopened as Ankara Airport and will serve both domestic and international operations.
The airport is expected to reduce pressure on the capital’s key hub, Esenboğa Airport, during major international events and high-level visits and ease congestion on its road network.
Focus is particularly on the role Ankara Airport is expected to play during the upcoming NATO Leaders’ Summit scheduled for July 7-8.
“2026 continues to be a year of summits for Türkiye, a country striving to reach the top in every field,” Erdoğan said at the inauguration ceremony.
He noted that Türkiye had already hosted the Zero Waste Forum in Istanbul earlier this month, bringing together more than 5,000 participants from 183 countries, while preparations were underway for several major international gatherings later this year.
According to Erdoğan, Türkiye will host the 77th International Astronautical Congress in October, followed by the 13th Summit of the Organization of Turkic States.
In November, the country is set to host the 31st United Nations Climate Change Conference (COP31), expected to attract more than 100,000 participants from 197 countries.
Erdoğan said Ankara’s growing diplomatic profile reflected Türkiye’s increasing influence in global affairs.
“As Türkiye’s weight in global politics increases, the flow of foreign delegations visiting Ankara also rises,” he said. “Located at the heart of 67 countries and 1.5 billion people within a four-hour flight radius, Türkiye, with Ankara, Istanbul and Antalya, has become a center where international diplomacy now beats.”
The president said Ankara Airport would help ease congestion at the capital’s main hub, Esenboğa Airport, which has seen annual passenger traffic increase from around 3 million two decades ago to approximately 15 million today.
“With the new airport facilities entering service, there will be relief in both air and road traffic around Esenboğa,” Erdoğan said.
Previously used primarily for military purposes, Ankara Airport has been transformed into an international aviation facility capable of accommodating wide-body aircraft and hosting world leaders.
The modernization project was completed in eight months and included upgrades to the runway, apron, access roads and technological infrastructure to meet international aviation standards.
The existing runway was extended from 2,450 meters to 3,000 meters and widened from 42 meters to 60 meters, enabling the safe operation of wide-body aircraft.
Two turnaround areas totaling 15,000 square meters and a new 160,000-square-meter apron increased parking capacity to around 44 aircraft simultaneously.
Taxiways were fully renovated, while new parallel and connecting taxiways were built. A runway end safety area (RESA) was added to enhance operational safety.
Lighting systems, approach lights and navigation equipment were modernized in line with international standards, and the airport’s mechanical, electrical and drainage infrastructure was completely renewed.
The project also included the construction of a 4,800-square-meter state guesthouse and an open parking facility with capacity for more than 300 vehicles. All operational units were integrated through a single digital network.
In addition, authorities built a new 12.5-kilometer access road linking the airport directly to the “Crescent Star” complex, which will gather the Defense Ministry and the country’s military forces at what is said to be one of the most advanced military command centers in the world.
The route includes bridges and underpasses along a 3-kilometer section, featuring a 140-meter single-pylon cable-stayed bridge with an extradosed design, as well as a 40-meter overpass on Ankara Boulevard to ensure uninterrupted traffic flow.
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