BoJ Hikes Rates to 31-Year High Amid Weakening Yen

The Bank of Japan (BoJ) raised interest rates to a 31-year high on Friday, hiking them by 25 basis points to 1.25 percent.

BoJ Governor Kazuo Ueda emphasized the importance of stabilizing underlying inflation, which has been approaching two percent, and avoiding an adverse impact on the economy.

Despite the hike, the yen weakened to over 157 per dollar, a level not seen in 40 years, due to its low interest rates compared to those in other major economies.

The cheap yen is driving up the cost of imported goods, contributing to upward pressure on inflation, which remains close to the BoJ's two percent target at 1.7 percent in August.