BOJ Rate Hike to 1.25% Sparks Confusion

The Bank of Japan (BOJ) raised its benchmark interest rate to 1.25%, marking a 31-year high, after a vote that was not entirely unanimous.

The decision passed with a 7-2 margin, with two board members, Toichiro Asada and Ayano Sato, dissenting from the move to raise rates.

Hirofumi Suzuki, chief FX strategist at Sumitomo Mitsui Banking Corporation, expressed surprise that only two members voted to keep rates unchanged.

Despite the rate hike, the yen slipped below 157 per dollar, while 10-year Japanese government bond yields fell. The Nikkei 225 index rose by about 1.5% following the announcement.