BOJ Raises Benchmark Rate to 1.25% Amid Global Interest Rate Hikes
The Bank of Japan (BOJ) raised its benchmark interest rate to 1.25%, the highest in 31 years, as it tries to normalize monetary policy after decades of keeping rates near or below zero.
The decision was expected and has been widely figured into recent global markets, with the BOJ Governor Kazuo Ueda saying the Japanese economy is continuing to recover gradually and inflation is close to the targeted 2%.
Ueda noted that more time is needed to see if price increases stay stable, along with monitoring wage growth and other risk factors. Two members of the nine-member board dissented, expressing concerns about the strength of Japan's economic growth.
The move comes as the U.S. Federal Reserve also raised its key rate this week, and the two countries have intervened together to prop up the yen. Despite the BOJ's decision, the US dollar grew stronger, reaching above 157 yen.