BOJ Follows Fed's Lead with 25-Basis-Point Rate Hike

The Bank of Japan (BOJ) has followed the lead of the Federal Reserve by raising its policy rate, but not without some dissent within the BOJ's Policy Board. The interest rate increase, a 25-basis-point hike to 1.25%, is the highest level since 1995 and marks a quickening in the BOJ's rate hike cycle.

The decision was made by a 7-2 majority vote, with board members Asada and Sato opposing the rate decision. Asada noted that recent CPI rises below 2% suggest economic conditions may not be as robust as thought, while Sato stated that raising rates is not suitable given current trends.

The move comes after the Federal Reserve's own rate hike on Wednesday, which was widely expected. The USD/JPY pair has been trading cautiously ahead of the BOJ's decision, with some analysts suggesting that markets are already pricing in a rate increase.