BOJ Dials Up Interest Rate to 31-Year High in Bid to Quell Inflation

The Bank of Japan has raised its benchmark interest rate to 1.25% from 1.0%, marking a 31-year high.

This move comes after decades of keeping interest rates near or below zero in an effort to stimulate borrowing and spending, counter deflation, and boost the economy.

Bank of Japan Governor Kazuo Ueda cited various risks, including the war in Iran, expanding demand for artificial intelligence, and currency fluctuations, as factors behind the decision.

Ueda noted that inflation is close to the targeted 2%, but more time is needed to see if price increases remain stable. Two board members dissented, expressing concerns about Japan's economic growth.