BOJ Hikes Rates to 31-Year High in Bid to Tame Japan Inflation

The Bank of Japan has raised interest rates to their highest level in over 30 years as it battles inflation fueled by rising energy prices and a weak yen.

The rate hike, which was widely anticipated, saw interest rates rise by 25 basis points to 1.25 percent, the highest since 1995.

The decision was made despite some dissent among officials, with two members voting against the move.

According to Marcel Thieliant of Capital Economics, inflation in Japan is expected to rise above the central bank's target of 2 percent due to higher energy costs.

The Japanese government has implemented various measures to mitigate the impact of inflation on household purchasing power, including a massive stimulus package and tax breaks on energy.