Bank of Japan Hikes Rates 25 Points, Highest Since 2008

The Bank of Japan (BOJ) has made its most aggressive monetary policy decision in over a decade, raising interest rates by 25 basis points to 0.5% on Jan. 24. This is the first time rates have reached this level since 2008, as the central bank responds to persistent inflation and a rise in wages. The decision reportedly followed weeks of speculation and came with an 8-1 split among board members. Governor Kazuo Ueda, along with Deputy Governor Ryozo Himino, had hinted at this decision many times in earlier public comments, pointing to the need to adapt monetary policy to changing conditions, mainly thanks to US president Donald Trump. Per the BOJ’s official statement, board member Toyoaki Nakamura was the sole dissenter, arguing that the BOJ should hold off on a rate hike until more data on corporate earnings becomes available.