Global Stocks and Bonds Fall as Central Banks Raise Rates to Combat Inflation

Central banks around the world continued to raise interest rates to combat inflation, causing stocks and bonds to dip on Friday.

The Bank of Japan raised its benchmark rate to a 31-year high of 1.25% as expected, but two board members dissented from the decision.

The move failed to support the yen, which fell 2.6% against the dollar for the week, its worst performance in two years.

Chris Scicluna, head of research at Daiwa Capital Markets Europe, said there's a risk the yen could weaken sharply again, further exacerbating inflation.

The Federal Reserve raised rates for the first time in three years on Wednesday and switched to a more aggressive stance on inflation, which knocked the yen and put it on course for its worst weekly performance against the dollar in two years.