Bank of Japan Raises Rate to 1.25%, Highest Since 1995

The Bank of Japan raised its policy rate by 25 basis points to 1.25%, marking the highest level since 1995. This rate hike, occurring just three months after the last increase, indicates a faster pace in the BOJ's monetary policy normalization since March 2024. The decision was supported by a majority 7-2 vote among the board members. With inflation at 1.9% in August and the core inflation rate at 1.7%, this shift aims to stabilize inflation around the BOJ's 2% target, impacting future economic conditions in Japan.

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