BoJ Hikes Interest Rate to 1.25% Amid Growing Inflation Fears

The Bank of Japan has raised its benchmark interest rate to 1.25%, the highest level since 1995, in a move aimed at tackling inflation and maintaining economic stability.

In a 7-2 vote, the central bank's board decided to increase the overnight call rate by 25 basis points, reflecting growing concerns over underlying inflation nearing the 2% threshold.

The decision comes as Japan's Prime Minister Sanae Takaichi reshuffles her cabinet, vowing to focus on policies promoting growth. The Japanese Yen has weakened against the US Dollar, currently trading at 156.160.