New Delhi, June 16 -- The Bank of Japan raised its short-term policy rate on Tuesday to 1% from 0.75%, The Policy Board approved the move by a 7-1 majority vote. The new guideline for money market operations will take effect from Wednesday.

The interest rate applied to the complementary deposit facility, paid on current account balances held by financial institutions excluding required reserves, was raised to 1.0 per cent. The basic loan rate under the complementary lending facility was set at 1.25 per cent. The basic discount rate was also set at 1.25 per cent, though bill discounting remains suspended. One board member, Asada Toichiro, dissented. He argued downside risks to production and employment from the Middle East situation outwe...