BoJ Hikes Rate Despite Steady Inflation as Diesel Prices Soar

The Bank of Japan (BoJ) has raised its benchmark interest rate by 25 basis points to 1.25%, its highest level since April 1995, despite Japanese inflation remaining steady at 1.9% year-on-year in August.

According to the BoJ Governor Kazuo Ueda, the central bank has entered a new phase focused on preventing inflation from overshooting its 2% target, suggesting that further rate hikes may be necessary if price growth exceeds this threshold.

In contrast, UK retail sales volumes advanced by 0.5% month-on-month in August, defying consensus analyst forecasts of a 0.2% contraction, and year-on-year retail sales growth accelerated sharply from 1.2% in July to 2.4% in August.

The US diesel prices have reached a historic high of $6.29 per gallon, representing an approximate year-on-year surge of 68%, which is placing upward pressure on freight and food distribution costs due to the reliance on diesel-powered trucking networks.