BOJ Raises Rates to 31-Year High Amid Inflation Fears

The Bank of Japan has raised interest rates to their highest level in over 30 years as it attempts to combat inflation driven by rising energy prices and a weak yen.

The policy rate was increased to 1.25 percent, marking the first rise since 1995, following a 7-2 vote by policymakers.

The move was expected by markets after recent tightening by the European Central Bank and the US Federal Reserve, but some analysts were surprised that the decision was not unanimous.

Policymakers are also watching the yen, which has fallen to a 40-year low against the dollar in July, prompting an unprecedented joint intervention in currency markets.