BOJ Hikes Rate to 31-Year High Amid Inflation Concerns
The Bank of Japan raised its policy interest rate by 0.25 percentage points to 1.25 percent, marking the highest level in about 31 years.
The decision came after a two-day board meeting and follows an increase to 1.0 percent at the June policy meeting, which was the shortest interval between increases since the BOJ began its current rate hike cycle in March 2024.
The central bank lifted the rate amid concerns that Japan's inflation could overshoot its expectations, driven by a strong yen and higher crude oil prices due to the Middle East conflict and shipping disruptions through the Strait of Hormuz.
Two policymakers voted against the rate hike, which will push up borrowing costs for businesses and households, potentially weighing on economic activity and challenging the BOJ's efforts to contain inflation without hampering growth.