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

The Bank of Japan raised interest rates by 25 basis points to 1.25% on September 17, its highest level since 1995. The move had been widely expected, and the central bank cited growing inflationary risks as the reason for tightening. Despite the hike, the yen weakened against the dollar, a reaction traders attributed to the fact that the move was already priced in and to lingering doubt about how fast the BOJ will move next. Bitcoin rose against the yen following the announcement. Elsewhere, Asian stocks and chip shares gained, tracking Wall Street's advance as US Treasury yields fell, while oil's retreat also eased inflation concerns across the region. What remains unresolved is the pace of future hikes. Bond strategists noted that long-end yields globally found some relief after the Bank of England's own signals, but the BOJ's next move will depend on incoming inflation data.