BoJ Hikes Rates to Highest Since '95 Amid Inflation Fears

The Bank of Japan (BoJ) has raised its key interest rate by 25 basis points to 1.25%, its highest since 1995, in response to persistent inflationary pressures and strong domestic economic growth.

The move is seen as a step towards normalising monetary policy after years of an ultra-low policy stance.

As expected, the BoJ lifted its benchmark interest rate to address concerns over inflation, which has been approaching 2%.

According to Swissquote senior analyst Ipek Ozkardeskaya, rates may need to increase closer to the 1.5-2% range to be considered 'neutral', implying at least one and up to three additional 25bp rate hikes in the coming quarters.