The Bank of Japan raised rates to the highest since 2008

On Friday, the Bank of Japan increased interest rates by 25 basis points, bringing them to 0.5%. This was the highest discount rate level since 2008. This decision is due to the regulator's desire to normalize monetary policy against the background of persistent signs of inflation and rising wages. 

Against the background of this decision, the Japanese yen strengthened its position, adding 0.6% and reaching 155.12 against the dollar. At the same time, the country's main stock index, Nikkei 225, showed a slight increase.

The yield on ten-year Japanese government bonds also rose, adding 2.5 basis points and reaching 1.23%.

Previously, the regulator has repeatedly stressed that in order to raise interest rates, it is necessary to have a so-called «beneficial cycle» in which rising wages contribute to higher prices.