BOJ Slams Brakes on Low Rates with Historic Interest Rate Hike

Japan's central bank has raised its main interest rate to a fresh 31-year high in an effort to combat rising prices and economic pressures. The Bank of Japan (BOJ) increased the rate from 1% to 1.25%, a level not seen since 1995, in a widely expected move on Friday.

This marks the sixth time the BOJ has raised rates in the last two and a half years, as it continues to move away from decades of ultra-low borrowing costs. The rate hike comes amid global economic pressures, with major central banks around the world hiking rates due to higher energy prices caused by the Iran war.

The US Federal Reserve raised its benchmark interest rate for the first time in over three years on Wednesday, while the European Central Bank also increased its borrowing costs earlier this month. The BOJ's move is expected to make the Japanese currency stronger as it becomes more attractive to traders.