Bank of Japan raises rate to 1.25% in split vote as two members oppose

The Bank of Japan raised its benchmark interest rate to 1.25 percent today in a split Policy Board vote with two members opposing, Nikkei Asia reports. The move signals a further retreat from decades of ultra-loose policy as persistent inflation and a weak yen pressure policymakers and test their credibility. It matters for global markets because Japan’s rates anchor funding costs and shifts can ripple through currencies, bonds, and equities worldwide.

According to Nikkei Asia, the split decision highlights internal caution about domestic growth risks, wage dynamics, and the pace of normalization. Watch for swift moves in the yen, Japanese government bond yields, and the Nikkei as traders parse the near-term policy statement, balance sheet plans, yield curve operations, and Governor Kazuo Ueda’s remarks. [Developing. This article will be updated.]