BOJ Set to Raise Rates Amid Inflation Pressure and US Influence

The Bank of Japan is expected to raise interest rates on Friday in response to rising inflation and pressure from Washington. The move would be the latest in a series of hikes, with some members suggesting a 0.25 percentage point increase to 1.25 percent.

The decision comes as markets await the US Federal Reserve's decision on Wednesday, following the European Central Bank's rate hike last week. Inflation has accelerated towards Japan's two percent target, fueled by surging energy prices and a weak yen.

Takehiko Nakao, Japan's former currency chief, said that raising interest rates is necessary to contain inflation, warning that delaying the response could lead to sharper hikes in the future.