Bank of Japan raises interest rate to 31-year high of 1.25%

The Bank of Japan raised its benchmark interest rate by 0.25 points to 1.25%, the highest level in 31 years, in its first hike since June. The move responds to inflation above the 2% target, driven by energy prices, global supply pressures and rising wages amid a shrinking labour pool, and follows pressure to keep pace after the Federal Reserve's own rate hike on Wednesday.