Bank of Japan Raises Interest Rates Again to Combat Inflation

Japan's central bank has raised interest rates for the second time in three months to combat inflation, which is currently sitting at around 2%.

The Bank of Japan increased its policy rate to 1.25%, following a rise to 1% in June, the highest level since 1995.

Macroeconomist Fujiwara Ippei said that even 2% inflation was 'maybe shocking' for some people in Japan, who are used to zero per cent interest rates.

The Bank of Japan pointed to supply shocks from rising import and production costs as the main driver behind current inflation.