The Bank of Japan raised its benchmark interest rate by 25 basis points to 1.25% on September 18, pushing borrowing costs to their highest level since April 1995. The decision passed with a 7-2 vote under Governor Kazuo Ueda, who framed the move as a necessary response to persistent inflation pressures. Rising global energy costs and a weak yen have driven consumer prices above the BOJ’s 2% target. The yen paradoxically weakened to approximately 157 per dollar following the announcement, with the rate differential relative to the Federal Reserve and the European Central Bank keeping the yen as a funding currency for carry trades.
Source: Read the original article
