Bank of Japan Raises Benchmark Interest Rate Amid Global Economic Shift

Japan's central bank has raised its benchmark interest rate to 1.25 per cent from 1.0 per cent, marking a 31-year-high.

The Bank of Japan aims to normalize monetary policy after decades of keeping interest rates near or below zero to combat deflation and revitalize the economy.

The decision comes as inflationary pressures rise due to the war in Iran, which has driven up oil prices. Japan, a major importer of oil, is particularly vulnerable to these price hikes.

The rate increase was widely expected by global markets after the US Federal Reserve also raised its key rate earlier this week.