Bank of Japan Raises Benchmark Interest Rate to 31-Year High

Japan's central bank has raised its benchmark interest rate to 1.25%, marking a 31-year-high. The Bank of Japan made this decision after decades of keeping interest rates near or below zero, which was intended to encourage borrowing and spending in order to combat deflation and revive the economy.

The inflationary pressures are rising due to the war in Iran, which has caused oil prices to surge recently. This is particularly concerning for resource-poor Japan, as it relies heavily on imported oil.

The U.S. Federal Reserve also raised its key rate earlier this week, and analysts expect the Bank of Japan to raise interest rates again later this year or early next year.