Bank of Japan hikes key interest rate to 1.25%
The central bank's decision to raise its rate won a 7-2 majority vote following recent tightening by the European Central Bank and US Federal Reserve.
Tokyo's Bank of Japan boosted interest rates to a more than 30-year peak of 1.25% on Friday, aiming to combat inflation driven by soaring energy costs and a weakened yen. The decision, expected by financial markets, followed similar tightening measures by the European Central Bank and the U.S. Federal Reserve. The central bank raised its key rate by 25 basis points, with a 7-2 vote in favor, as reported on its website.
Inflation has been exacerbated by a Middle East crisis that has sent oil prices soaring and has no immediate end in sight. This increase in energy costs has put upward pressure on inflation. Central bankers are also focused on supporting the yen, whose value had plummeted in July to its weakest level against the dollar in four decades, leading to a historic joint effort by the U.S. and Japan to stabilize the foreign exchange market.
Looking ahead, the BOJ indicated it will persist in raising the policy interest rate. With underlying CPI inflation nearing two percent and financial conditions remaining accommodative, the bank is set to maintain a higher policy interest rate.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Bank of Japan ups rates to 31-year high news.rthk.hk
- Bank of Japan hikes key interest rate to 1.25% freemalaysiatoday.com
- Bank of Japan raises rates, and might do so again soon japantimes.co.jp
