Bank of Japan hikes interest rates by 25 bps to 1%, highest level in 31-years

The Bank of Japan raised its short-term policy rate by 25 basis points to 1.0% from 0.75%, the highest level in 31 years, in a 7-1 vote. This was the first rate hike since December and brings the policy rate to levels last seen in 1995. The move, aimed at countering inflation risks linked to US-Iran tensions, could trigger yen carry trade unwinding and FII outflows from emerging markets including India.