Japan lifts rates to highest level in 17 years after inflation rises
By Frank Prenesti
Date: Friday 24 Jan 2025
(Sharecast News) - Japan's central bank on Friday lifted interest rates to their highest level in 17 years following a rise in inflation, and indicated more moves could be on the way.
In a widely flagged move, the Bank of Japan (BoJ) increased its short-term policy rate to "around 0.5%".
Data released beforehand showed headline Japanese inflation hit 3.6% in December, or 3% adjusted for food prices, up from 2.7% in November - the fastest pace in 16 months.
"Japan's economic activity and prices have been developing generally in line with the Bank's outlook, and the likelihood of realising the outlook has been rising," the BoJ said in a statement.
If its outlook is met, "the bank will accordingly continue to raise the policy interest rate and adjust the degree of monetary accommodation", it added.
The rate decision, by a vote of 8-1, also boosted the Japanese yen, which rose to 155.20 against the dollar from 156.3.
Reporting by Frank Prenesti for Sharecast.com
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