BOJ Boosts Interest Rate to Highest Level in 31 Years

The Bank of Japan (BOJ) raised its benchmark interest rate to 1.25% on Friday, marking the highest level in 31 years. This move is part of the central bank's effort to normalize monetary policy and counter deflation. The decision was expected after a two-day monetary policy board meeting.

According to BOJ Governor Kazuo Ueda, the decision was made after considering various risks, including the war in Iran, expanding market demand for artificial intelligence, and currency fluctuations. 'The Japanese economy is continuing to recover gradually,' he stated, noting that inflation is close to the targeted 2%.

Two members of the nine-member board dissented from the decision, citing concerns about Japan's economic growth. This move follows a similar rate increase by the U.S. Federal Reserve this week, which was aimed at quelling high inflation.