The Bank of Japan (BOJ) lifted its key policy rate to a 31-year high on Tuesday as it counters a spike in consumer prices caused by the Middle East war, even as Washington and Tehran agreed on a peace memorandum.
The central bank for the world's fourth-largest economy raised its benchmark rate 25 basis points to 1.0%, the highest since 1995 and marking the first increase since December.
The widely expected decision followed rate hikes by the European Central Bank (ECB) and in Indonesia last week, after the conflict caused economic havoc and led to rising prices worldwide.
With U.S. inflation at a three-year high, expectations are growing that the Federal Reserve (Fed) will follow suit, albeit not at new boss Kevin Warsh's first gathering this week.
"While higher crude oil prices have been exerting downward pressure on economic activity, the economy has generally been supported by factors such as high levels of corporate profits and an improvement in the employment and income situation," the BOJ said.
