Bank of Japan raises interest rate to 1.25%, the highest since 1995

The Bank of Japan lifted its benchmark rate by a quarter‑percentage point to 1.25%, the highest level seen since 1995, after a 7‑2 vote among policymakers. The move reflects inflation that is edging close to the central bank’s 2% target.
Higher Japanese rates raise short‑term yields and can influence global bond markets, while the yen’s recent slide against the US dollar adds a currency dimension for investors. Export‑driven companies may feel pressure from a weaker yen, whereas higher yields could make Japanese bonds more attractive relative to other assets.
Investors should keep an eye on the BOJ’s next policy meeting, upcoming inflation readings, and the USD/JPY exchange rate. Any shift in the bank’s stance or a change in global risk sentiment could further affect equities and currency markets.
Key takeaways
- Category: Economy.
- Flagged as a high-impact, market-moving story.
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