Bank of Japan raises rate to 1.25%, points to more tightening

The Bank of Japan lifted its benchmark rate to 1.25%, its highest level in roughly three decades, extending its break from the ultra-low-rate policy that shaped Japan’s economy for years. The move reflects persistent inflation, and Governor Kazuo Ueda indicated that more increases remain possible if economic and price trends continue to support them. The important change is the pace: Japan is now raising rates faster than at any point since around 1990, forcing households and companies to prepare for costlier borrowing while global investors rethink trades built on borrowing cheaply in yen.