Japan Hikes Interest Rates to Highest Level in Three Decades

Japan's central bank raised its benchmark interest rate to 1.25% from 1.0%, marking the highest level in 31 years. This move aims to normalize monetary policy after decades of keeping rates near or below zero.

The Bank of Japan has been trying to counter deflation and pull the economy out of the doldrums by encouraging borrowing and spending. The decision was expected, as it has widely figured into recent global markets.

Bank of Japan Gov. Kazuo Ueda said the decision was made after considering various risks, including the war in Iran, expanding market demand for artificial intelligence, and currency fluctuations.