The Bank of Japan raises its short-term policy rate by 0.25 percentage points to 1.0%, its highest level since 1995, in a bid to contain inflation pressures linked to the Iran war. In its decision, the central bank signals concern that higher oil-related costs are being passed through to prices and warns that this transfer is happening at a relatively fast pace. Several reports describe the move as widely expected, following other central bank tightening actions abroad. The European Central Bank and Bank Indonesia are reported to have increased borrowing costs earlier, and expectations are that the US Federal Reserve and the Bank of England may hold rates rather than hike immediately. Some coverage also notes that the US and Iran reach a peace deal over the weekend, including steps aimed at reopening the Strait of Hormuz, though the BoJ’s action still reflects broader worries about inflation from the conflict and global energy costs. Overall, the decision aligns with a cautious effort by Japan’s central bank to bring inflation dynamics under control while other major central banks face their own timing questions.