The Bank of Japan (BoJ) raised its benchmark interest rate by 25 basis points from 0.25% to 0.5% in an 8-1 vote on Friday, to its highest level in 17 years, with the yen strengthening modestly against the US dollar after the announcement.
The BoJ said that "if the outlook for economic activity and prices presented in the January Outlook Report will be realized, the Bank will accordingly continue to raise the policy interest rate and adjust the degree of monetary accommodation." The central bank also noted in its statement that "there have been many views expressed by firms stating that they will continue to raise wages steadily in this year's annual spring labor-management wage negotiations, following the solid wage increases last year." Underlying inflation had been increasing gradually toward 2%, the BoJ added.
The dollar traded 0.29% lower against the yen, going for ¥155.5550 at 4:57 am CET.
