Bank of Japan Hikes Interest Rate to 1.25%, Highest Level in 31 Years

Japan's central bank has raised its benchmark interest rate to 1.25%, marking the highest level in 31 years.

The Bank of Japan, led by Governor Kazuo Ueda, made this decision after considering various risks such as the war in Iran and currency fluctuations.

This move is part of the bank's efforts to normalize monetary policy after decades of keeping interest rates near or below zero to combat deflation and boost borrowing and spending.

The rate increase was expected, but two members of the nine-member board dissented, citing concerns about Japan's economic growth.