BOJ Raises Rates at Fastest Pace Since 1990 but Yen Continues to Slide

The Bank of Japan (BOJ) raised its benchmark interest rate to 1.25% on Friday, marking the second increase in three months and the fastest pace since 1990.

The decision was widely expected by economists and priced into financial markets, but investors were disappointed that Governor Kazuo Ueda's guidance on future rate moves was less aggressive than anticipated.

Despite the increase, the yen weakened sharply, falling as much as 1.3% to around 158.05 against the dollar, while Japan's export-heavy Nikkei 225 gained 1.4%.