Updated

The Bank of Japan raised its benchmark interest rate to its highest level in 31 years, citing persistent concerns about inflation. The decision by the policy board was closely split 7-2, with board members Toichiro Asada and Ayano Sato dissenting from the hike. The move signals growing unease within the BOJ about price pressures even as it continues a cautious path toward policy normalization. Markets reacted in an unusual pattern following the hike: the yen weakened past 157 against the dollar rather than strengthening, the yield on the 10-year Japanese Government Bond slipped, and the Nikkei 225 gained 1.5%. Analysts noted the moves ran counter to the textbook expectation that a rate hike would boost the currency and pressure bond prices, suggesting investors may have already priced in the decision or are focused on other factors such as growth outlook and future BOJ guidance.