STORY: The Bank of Japan raised interest rates to a 31-year high on Tuesday.
It marks another landmark step in normalizing monetary policy...
as it focused on taming price pressures from the energy shock caused by the Iran war.
The hike was the first since December.
And aligns the BOJ with other central banks shifting towards tighter policy to combat inflation, including the European Central Bank.
Deputy Governor Shinichi Uchida acknowledged the recent U.S.-Iranian peace deal as a "welcome move".
But noted persistent inflationary risks.
Bank Governor Kazuo Ueda missed the meeting for medical treatment.
In a widely expected move, the BOJ decided to raise its short-term policy rate to 1% from 0.75%...
taking borrowing costs to levels unseen since 1995.
The bank added that the price outlook warranted attention...
as companies were seen passing on rising oil costs to each other at a "relatively fast pace,"...
which it said could push up consumer prices across a wide range of items.
The Nikkei jumped as much as 1% to set a fresh record high above 70,000 after the announcement.
The yen rose briefly before sliding to 160.29 per dollar.
The BOJ also decided to pause its bond taper program from April next year.
And continue to buy roughly $12.5 billion in Japanese government bonds per month.
The Middle East conflict has complicated the BOJ's policy path by adding inflationary pressure through higher oil costs.
While hurting an economy heavily reliant on imported fuel.
