Bank of Japan hikes rates to 1.25%, a 31-year high, on inflation concerns

The Bank of Japan raised its policy rate by 25 basis points to 1.25%, the highest since 1995, in a 7-2 vote, with dissenters Toichiro Asada and Ayano Sato opposing the hike. The move came three months after the BOJ's last hike, faster than the prior six-month gap, as the bank cited risks that inflation could overshoot its 2% target; August inflation stood at 1.9%. The yen weakened 0.45% to 156.64 per dollar after the decision, while the 10-year Japanese government bond yield fell 4.9 basis points to 2.947%.