BOJ Set for 31-Year High Interest Rate Hike Amid Fed Pressure

The Bank of Japan is set to raise interest rates on Friday to a 31-year high, marking its first hike in three months. The policy rate will increase from 1% to 1.25%, bringing it closer to levels deemed neutral by the BOJ.

The move comes after the Federal Reserve raised interest rates on Wednesday, and analysts say the pressure is mounting on the BOJ to keep pace. A widening of the US-Japan rate gap could weaken the yen and lift inflation through higher import costs.

Takeshi Ishida, a strategist at Kansai Mirai Bank, noted that 'the hurdle for Ueda's news conference has heightened' following the Fed's move.