Bank of Japan Raises Interest Rates

SINGAPORE (Reuters) – The Bank of Japan raised interest rates on Friday in a widely expected move, reflecting its growing optimism that wages will continue rising and keep inflation sustainably around its 2% target.

The board decided to raise the BOJ’s short-term policy rate to 0.5% from 0.25% by an 8-1 vote. Board member Toyoaki Nakamura dissented to the decision.

Quotes:

Naoya Hasegawa, Chief Bond Strategist at Okasan Securities, Tokyo

>The decision was in line with our expectations. We await comments from BOJ Governor Kazuo Ueda at his post-meeting news conference. We want to know his outlook for the future rate path, rather than why the BOJ raised rates at this meeting. The market now expects that the BOJ raises rates every six months, so we want to know Ueda’s view on that.