The Bank of Japan raised its policy rate by 25 basis points to 0.5%, the highest level since 2008. The decision was driven by signs of sustained inflation and rising wages, with the central bank aiming to normalize its monetary policy. The move was met with a strengthening of the Japanese yen and a rise in the Nikkei 225 stock index.
Following the decision, the Japanese yen strengthened 0.3% to trade at 155.61 against the dollar, while country's benchmark Nikkei 225 stock index rose 0.33%.
Nakamura said the central bank should only tweak policy after confirming a rise in firms' earning power from reports that would be out by the next monetary policy meeting.Before the meeting, senior BOJ officials, including governor Kazuo Ueda and Deputy Governor Ryozo Himino, had indicated the central bank's willingness to raise rates.
The head of Japanese Trade Union Confederation — Rengo — said that annual pay increases this year must exceed the 5.1% secured last year because real wages continue to fall,
BANK OF JAPAN INTEREST RATES INFLATION WAGES YEN
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