The Bank of Japan raised its key interest rate to about 0.5% from 0.25% Friday, noting that inflation is holding at a desirable target level.
The Bank of Japan made its first rate increase in 17 years in March last year, ending its negative interest rate policy, which amounts to negative borrowing rates.
The central bank has signaled that more interest rate raises may be coming, while stressing it plans to be extremely cautious to make sure the economy holds steady.
Japan’s position strikes a contrast from the U.S. Federal Reserve and the European Central Bank, which have been lowering rates after raising them to clamp down on inflation.
Recent price data show inflation hovering at about the central bank’s 2% target.
