BOJ Decides to Raise Policy Rate to 30-Year High

Tokyo, Dec. 19 (Jiji Press)–The Bank of Japan on Friday decided to raise its policy interest rate to a level unseen in 30 years in its first rate hike since January this year. At a two-day meeting from Thursday, the BOJ’s nine-member Policy Board unanimously decided to hike its target for the unsecured overnight call rate, a key interbank rate, to around 0.75 pct from around 0.5 pct. The BOJ’s policy rate had never exceeded 0.5 pct since September 1995, when the bank lowered its official discount rate, its then policy rate, from 1.0 pct to 0.5 pct. After its previous rate hike in January this year, the BOJ kept its policy rate intact for six Policy Board meetings in a row. “Japan’s economy has recovered moderately, although some weakness has been seen in part,” the BOJ said in a statement released after the latest decision. If the economy and prices move in line with the BOJ’s projections, the bank “will continue to raise the policy interest rate and adjust the degree of monetary accommodation,” the statement also said. END [Copyright The Jiji Press, Ltd.]