BOJ Hikes Rate to 1.25% Amid Inflation Concerns

The Bank of Japan (BOJ) has raised its key interest rate to 1.25%, marking its highest level since 1995. This decision comes just three months after the central bank's previous rate increase in June, with a 7-2 vote approving the hike.

The move reflects concerns about higher crude oil prices and a weak yen, which could push inflation back above the BOJ's 2% target. Japan's core consumer price index rose 1.7% in August from a year earlier, while excluding energy prices have continued to rise.

U.S. Treasury Secretary Scott Bessent emphasized monetary normalization and fiscal discipline during a recent meeting of G20 finance ministers. However, the U.S. Treasury has publicly stated that it does not demand a specific interest rate from Japan.