Bank of Japan has kept interest rates near or below zero for years.
The move was widely expected, and the yen gained sharply against the dollar ahead of Wednesday’s decision, trading at 152.75.
The Bank of Japan raised its key interest rate Wednesday to 0.25% from 0.1%, acting to curb the yen’s slide against the US dollar. The move was widely expected, and the yen gained sharply against the dollar ahead of Wednesday’s decision, trading at 152.75. But, the dollar rebounded slightly after the decision, to 153.09 yen.
Share prices in Tokyo slipped 0.4% in morning trading before the decision.
The central bank has kept interest rates near or below zero for years, seeking to spur inflation in hopes that would sustain stronger growth for one of the world’s largest economies.
A weak yen has pushed prices in Japan higher since it makes imported gas, oil and other necessities more expensive. The main index of inflation has exceeded the BOJ’s target of about 2% for months.
The dollar’s gains have reflected high interest rates in the United States, where the Federal Reserve is forecast to cut its main rate in September and to hold steady at a policy meeting later Wednesday.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – Associated Press)
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