Bank of Japan raises rates to 31-year high of 1.25% as inflation rises

The Bank of Japan (BoJ) raised interest rates by 0.25 to 1.25 percent, the highest level in 31 years, in response to rising inflation and pressure from the United States. This decision, the first hike since June, aims to move away from the ultra-low rates that have characterized Japanese monetary policy. Inflation in Japan is driven by rising energy prices and global supply pressures, while the BoJ faces a shrinking labor pool that is pushing wages higher.