BoJ Raises Rates to 31-Year High Amid US Pressure

The Bank of Japan (BoJ) has raised its policy rate to a 31-year high of 1.25 percent, following an unusual public campaign by US Treasury Secretary Scott Bessent for faster Japanese tightening.

According to reports from Al Jazeera and The New York Times, the BoJ's decision was widely expected and comes as Japan faces rising inflation and wages due to a 'slow-moving demographic shock' described by BoJ executive director Koji Nakamura.

The move is also in line with the Federal Reserve's recent hike, which raised its federal funds target range by a quarter point to 3.75-4 percent, citing elevated inflation and geopolitical uncertainty.

Izumi Devalier of Bank of America warned that the US rhetoric creates the impression that the BoJ was 'co-opted into policy,' raising concerns about the bank's independence and credibility.