BOJ Raises Interest Rate to 1.25% Amid Inflation Concerns
The Bank of Japan (BOJ) has raised its key interest rate by 25 basis points to 1.25% from 1.0%, marking the highest level since 1995. The decision was made at the BOJ's Monetary Policy Meeting, where a 7-2 majority voted in favor of the rate increase.
The central bank warned that underlying inflation could exceed its 2% target due to rising wage and price expectations. It also flagged risks from developments in the Middle East, AI-related demand, and foreign exchange rates, which could affect Japan's economic activity and prices.
The BOJ has been raising interest rates since 2004, but this is a significant milestone for the Japanese economy. The bank will continue to adjust its monetary policy to respond to changes in economic activity and prices, as well as financial conditions.