The Bank of Japan (BOJ) on Friday raised its policy interest rate from 1% to 1.25% with a 7-2 vote, reaching its highest level in 31 years. This move aims to counter persistent inflationary pressures caused by soaring oil prices and aligns with interest rate hikes by major central banks in Europe and the US. The BOJ stated that high wholesale inflation and price pressures from inter-company transactions have begun to pass through to consumer prices, with underlying inflation approaching 2%. Markets are closely watching Governor Kazuo Ueda's upcoming press conference for clues on the pace and timing of future rate hikes.