The decision to wait until January to hike the rate appeared tied to a need to confirm wage trends, and gauge the initial market reaction to the return of Donald Trump to the White House. The BOJ flagged in its statement the relative stability of current global financial markets as a favourable factor, an indication that it had been monitoring the response to the first days of the new US administration.
The Bank of Japan raised its key policy rate Friday to the highest level since 2008 and took a more bullish view on the strength of inflation, fueling expectations for more rate hikes and supporting the yen.
Governor Kazuo Ueda and his fellow board members lifted the overnight call rate by a quarter-percentage point to 0.5% at the end of a two-day meeting, according to a statement from the central bank. A hike was almost fully priced into market expectations ahead of the announcement.
