BOJ Set to Raise Interest Rates to Record High Amid Inflation Fears

The Bank of Japan (BOJ) is set to raise its policy rate for the first time in three months, taking it to a 31-year high of 1.25% on Friday.

This move follows similar actions by other major central banks, including the European Central Bank and an expected tightening by the U.S. Federal Reserve later this week, as they all work to combat persistent inflation pressures driven by soaring oil costs and a weak yen.

The BOJ's decision is seen as a step towards neutralizing its ultra-low interest rates policy, which has helped cement the yen's status as a cheap global funding currency.

The hike is expected to be 25 basis points, with some analysts favoring this smaller increase over a larger one due to concerns about the impact on financial conditions.