Bank of Japan Raises Interest Rate to 1.25%, Highest in 31 Years

The Bank of Japan (BOJ) has increased its main interest rate from 1% to 1.25%, marking a new 31-year high in an attempt to combat rising inflation. This rate hike follows broader trends among major central banks, including the U.S. Federal Reserve's recent increases. Japan's core inflation rate slightly eased to 1.7% in August but remains near the BOJ's target of 2%. This interest rate adjustment is significant as it reflects Japan's shift from ultra-low borrowing costs and could stabilize the yen, which has recently faced pressure amid rising energy prices.