For only the second time in 17 years, Japan's central bank has raised borrowing costs, increasing its key interest rate to “around 0.25%” from the previous 0%-0.1% range.

This move signals a shift towards normalizing monetary policy after a decade of stimulus measures and includes plans to unwind its massive bond-buying program.

Despite the rate hike aligning with expectations, it contrasts with Japan's recent poor economic performance, marked by a 2.9% annualized contraction in early 2024 and lower-than-expected consumer price growth.

Economists predict further tightening by the Bank of Japan in the coming year, following its first rate increase since 2007 in March, which ended the global era of negative interest rates initiated in 2016.


(colombotimes.lk)