BOJ Hikes Rates to 31-Year High Amid Global Inflation Concerns

The Bank of Japan (BOJ) has raised interest rates to a 31-year high of 1.25% in its latest decision, joining other major central banks in fighting persistent inflation pressures.

This move takes interest rates closer to levels the BOJ deems neutral to the economy, marking another step away from decades of ultra-low rates that cemented the yen's status as a cheap global funding currency.

The decision follows rate hikes by its European and US peers, highlighting central banks' focus on global inflation risks caused by soaring oil costs, expansionary fiscal policies, and surging demand for AI investment.

BOJ Governor Kazuo Ueda's news conference at 3:30 p.m. (0630 GMT) will be closely watched for clues on the pace and timing of future rate hikes.