Bank of Japan Hikes Rates to 31-Year High Amid Inflation Fears

The Bank of Japan raised its interest rates to a 31-year high on Friday, marking another step away from decades of ultra-low rates. The bank's policy rate was increased to 1.25 percent from one percent by a 7-2 vote.

This move follows rate hikes by the European Central Bank and the US Federal Reserve, which are fighting persistent inflation pressures driven by soaring oil costs. Wholesale inflation remains elevated, with price pressures from business-to-business trading spilling over into consumer prices.

The bank's governor, Kazuo Ueda, is set to hold a news conference later on Friday, where markets will be focusing on clues about the pace and timing of future rate hikes.