BOJ Boosts Interest Rate to 31-Year High Amid Inflation Concerns

Japan's central bank has raised its main interest rate to a new 31-year high as it attempts to curb rising prices and inflation. The Bank of Japan increased the rate from 1% to 1.25%, a level not seen since 1995.

The move comes amid growing economic pressures, including a persistently weak yen, rising energy costs, and a shrinking workforce. Core inflation fell to 1.7% in August from 1.8% the previous month, but remains close to the bank's 2% target level.

Market analyst Lale Akoner said, 'One of the world's last sources of ultra-cheap money is disappearing.'

The BOJ has been raising rates since 2024, when it stood at minus 0.1%, and has now hiked rates six times in the last two and a half years.