TOKYO - The Bank of Japan (BOJ) has decided to raise its policy interest rate from an annualized 0.25 percent to 0.5 percent. This marks the first rate hike in six months and appears aimed at correcting the historically weak yen.
Following the decision, the yen appreciated by approximately one yen against the dollar, with the USD/JPY pair now trading in the 155.20 range.
The policy rate increase to 0.5 percent was approved by a vote of eight to one among BOJ policymakers and represents the highest level since October 2008.
In its "Outlook Report," released alongside the decision, the BOJ highlighted the depreciation of the yen and rising rice prices as factors pushing inflation higher. The inflation forecast was revised upward compared to three months ago, with projections raised by 0.2 percent for the current fiscal year and by 0.5 percent for the next fiscal year.
The rate hike is also seen as part of efforts to address the yen’s historically low levels.
This afternoon, attention will turn to BOJ Governor Kazuo Ueda's press conference, where he is expected to provide his economic outlook and potentially signal whether further rate hikes are on the horizon.
Source: TBS
