What to know about the Bank of Japan's interest rate hike

Group 1 - The Bank of Japan raised its key policy rate by 0.25 percentage points to 0.75%, marking the highest level since September 1995 to curb inflation [1] - Inflation in Japan has remained above the BOJ's target of about 2%, recorded at 3% in November, excluding volatile fresh food costs [2] - The BOJ's decision to raise rates comes after Japan's economy contracted at a 2.3% annual rate in the last quarter, despite improved business sentiment and price pressures [4] Group 2 - The current 0.75% rate is still considered low, especially compared to the rates of other central banks that have raised rates to combat inflation [3] - Japan's national debt is nearly three times the size of its economy, and low interest rates have been a strategy to manage this debt [5] - The weakening of the Japanese yen has contributed to rising inflation, as it increases the cost of imported goods [6]