Tokyo: The Bank of Japan raised interest rates today to their highest level in 31 years. The Bank's Policy Board decided at its two-day monetary policy meeting, which concluded today, to raise the interest rate from 1 percent to 1.25 percent, its highest level since 1995. Seven members of the board voted in favor of the decision, while two opposed it.

According to Qatar News Agency, the move had been widely expected as the Bank sought to avoid the risk of inflation overshooting its 2 percent target. Higher import costs resulting from the yen's decline to its lowest levels against the US dollar in decades, coupled with the sharp rise in crude oil prices due to the conflict in the Middle East, have heightened concerns that inflation could exceed the Bank's forecasts.

The Bank of Japan last raised its interest rate in June.