Japan's Central Bank Raises Interest Rate to 1.25%

Japan's central bank, the Bank of Japan, has raised its benchmark interest rate to 1.25% from 1.0%, marking a 31-year high.

The move is part of the bank's efforts to normalize monetary policy after decades of keeping rates near or below zero to stimulate borrowing and spending in the economy.

Inflationary pressures are rising due to the war in Iran, which has led to soaring oil prices. This poses a significant challenge for Japan, which relies heavily on imported oil.

The Bank of Japan had been expected to raise rates, with many market participants factoring this into recent global markets.