BOJ Hikes Interest Rate to 31-Year High Amid Concerns Over Inflation

The Bank of Japan (BOJ) has raised its policy rate by 25 basis points to 1.25%, marking the highest level since 1995.

This move comes just three months after the BOJ's last hike, which was part of a quickening in the central bank's rate hike cycle since it started monetary policy normalization in March 2024.

The decision was made by a 7-2 majority vote, with board members Toichiro Asada and Ayano Sato dissenting from the hike. They were appointed by Prime Minister Sanae Takaichi earlier this year.

BOJ board member Asada stated that recent CPI rise below 2% means economic conditions aren't necessarily robust, while Sato said current economic and price trends have not significantly accelerated, making it unsuitable to raise rates.