BOJ Raises Interest Rate to 31-Year High Amid Global Inflation Pressures

The Bank of Japan has increased its main interest rate to 1.25%, a level not seen since 1995, as part of its efforts to curb rising prices and counterbalance the country's economic pressures.

This decision is in line with other major central banks around the world that have been hiking rates to combat inflation caused by higher energy prices. The US Federal Reserve raised its benchmark interest rate for the first time in over three years earlier this week, while the European Central Bank also increased borrowing costs last month.

The BOJ has been steadily raising the rate since 2024, when it stood at minus 0.1%. This is the sixth time the bank has hiked rates in the past two and a half years, with the goal of reaching a level similar to other major economies.