BOJ Expected to Hike Interest Rate to Highest Level in Over Three Decades

The Bank of Japan is poised to raise its policy interest rate by 0.25 percentage points to 1.25% at its upcoming policy-setting meeting, according to informed sources.

This would mark a significant increase in the BOJ's policy rate, which has not been seen since April 1995 when it stood at 1.25%. The last time the interest rate was this high was over 31 years ago.

The decision comes as underlying inflation approaches the BOJ's 2% target, and the central bank aims to respond to upside risks to prices. The sources point to higher oil prices, a weaker yen, and rising demand related to artificial intelligence as contributing factors to the price increases.