BOJ Hikes Interest Rate to 1.25% Amid Ongoing Price Pressures

The Bank of Japan (BOJ) has raised its benchmark interest rate to 1.25%, marking a significant shift away from years of ultra-loose monetary policy.

The decision comes amid ongoing price pressures, higher energy costs, and a weakening Japanese yen, which is making imports more expensive for the country's economy.

Japan's core consumer inflation rate has moderated to 1.7% in August, but remains close to the BOJ's 2% price-stability target.

The central bank must now balance controlling inflation with maintaining economic growth, as higher interest rates can have a cooling effect on activity.