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Story summary
- The Bank of Japan raised its policy rate to 1.25% in September, its first hike since June 2024.
- Underlying inflation, excluding fresh food and special factors, rose 3.2% YoY in September, the highest in three years.
- Governor Kazuo Ueda said near-2% underlying inflation forces the bank to keep raising rates.
- BOJ staff estimate the neutral rate between 1.1% and 2.5%, giving room for further hikes.