BoJ Raises Benchmark Rate to 1.25 Percent in Shift Away from Deflation

The Bank of Japan has raised its benchmark interest rate to 1.25 percent, marking a significant shift in Japan's economic policy.

This is the highest level since 1995 and represents a decisive break from Japan's deflationary era, which lasted for nearly 15 years.

The BoJ's decision was influenced by rising inflation pressures, driven by wage growth, higher energy costs, and a weaker yen.

Kazuo Ueda, the governor of the BoJ, warned that underlying inflation approaching 2 percent could lead to overheating and negatively affect the economy.