BOJ Poised for Rate Hike to 1.25% Amid Rising Oil Prices

The Bank of Japan is expected to raise its policy rate by 25 basis points to a 31-year high of 1.25% in response to rising oil and import costs that are intensifying inflation risks.

This move would mark the first rate hike in three months and extend the central bank's gradual withdrawal from its ultra-loose monetary policy.

The expected increase comes as policymakers assess whether rising costs are becoming more persistent and could push inflation higher, with global oil prices surging amid disruptions linked to the Middle East.

Japan's imports jumped 28% year-on-year in August, with higher oil prices contributing significantly to the increase.