Japan's central bank (BOJ) raised its policy rate to 1.25%, marking the second increase this year and the highest level since 1995. Governor Ueda signaled a strategic pivot from stimulating inflation toward 2% to maintaining price stability at that level, citing rising inflation risks. The decision was not unanimous, with two board members dissenting. Despite monetary tightening, Ueda maintained that financial conditions remain accommodative, suggesting room for further policy stiffening. Currency markets reacted with initial yen weakness.