Japan's central bank raises key rate to 0.75%—highest since 1995—amid inflation and economic caution.

The Bank of Japan has raised its key policy rate to 0.75%, its highest level since 1995, in response to persistent inflation above its 2% target. The move marks a significant shift from decades of near-zero rates and aggressive stimulus aimed at fighting deflation. While inflation remains elevated due to rising energy and food costs, the central bank emphasized cautious progress, noting ongoing economic fragility and high public debt. Future rate decisions will depend on incoming data, with markets reacting to the policy normalization amid global economic uncertainty.