BANK OF JAPAN RAISES INTEREST RATE TO 0.5 PCT FROM 0.25 PCT

MOSCOW, Jan 24 (Bernama-Sputnik/RIA Novosti) -- The Bank of Japan has raised its short-term interest rate to 0.5 per cent from 0.25 per cent, the regulator said in a statement on Friday, reported Sputnik/RIA Novosti.

The regulator's decision coincided with the forecast of analysts surveyed by the Trading Economics portal.

In February 2007, the Japanese central bank raised the key rate to 0.5 per cent, and then, starting in October 2008, began to lower it. In January 2016, the regulator introduced a negative key rate - at minus 0.1 per cent. In 2024, the Bank of Japan raised the rate twice – to 0-0.1 per cent in March and to 0.25 per cent in July.

"Short-term interest rate (uncollateralised overnight call rate) raised to "around 0.5 per cent" (previously "around 0.25 per cent")" the bank said.

The country’s economy is gradually recovering, although there is weakness in some aspects, the regulator said.

"On the price front, underlying CPI inflation has been increasing gradually toward the price stability target of 2 per cent," the regulator said.

The Bank of Japan said it projects that CPI inflation will be in the range of 2.5-3.0 per cent for fiscal 2024, around 2.5 per cent for fiscal 2025, and around 2 per cent for fiscal 2026 partially due to higher import prices caused by a recent depreciation of the yen, among other factors.

Consumer prices in Japan rose 3.6 per cent year-on-year in December after rising 2.9 per cent the previous month, the national statistics bureau said. Consumer prices rose 0.6 per cent in December after rising 0.4 per cent in November.

Core consumer prices, which exclude the cost of perishable food, rose by 3 per cent year-on-year from 2.7 per cent the previous month, in line with analysts polled by Trading Economics. In December, core consumer prices rose 0.3 per cent after rising 0.4 per cent in November.

--BERNAMA-SPUTNIK/RIA NOVOSTI