The Bank of Japan has decided at a monetary policy meeting to raise its short-term interest rate target to about 0.25%. This is the second increase this year.
Bank of Japan Gov. Kazuo Ueda indicates the interest rate could be flexibly hiked in line with economic activity and commodity prices. This contradicts the previous cautious approach that favored taking plenty of time to implement any policy change.
According to Ueda, the bank planned to increase rates if economic activity and price outlooks changed in line with the bank’s projections or it decided there was a risk that future prices could rise more than forecast.
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