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

The Bank of Japan (BOJ) raised its interest rate to 1.25% on September 18, marking a 31-year high and joining other major central banks in fighting inflation.

The decision was made by a 7-2 vote, with two dovish board members dissenting. The BOJ's move follows rate hikes by the European Central Bank (ECB) and the US Federal Reserve (Fed), which have raised their key rates to 2.5% and 3.75%-4.00%, respectively.

The BOJ's policy rate is now closer to its estimated neutral range of 1.1% to 2.5%. However, some analysts see the BOJ's slow pace of rate hikes as a reason for the weak yen, which pushes up import costs and broader inflation.