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

The Bank of Japan raised its target rate from 1% to 1.25% on September 18, its highest since 1995. The move extends tightening since leaving negative rates in 2024. The increase was widely expected, with analysts seeing further rises ahead. I read this as Tokyo signaling confidence on inflation while testing how much tightening markets can absorb.