Bank of Japan raises key interest rate for second time in 17 years [Video]

The Bank of Japan lifted its main interest rate Wednesday for just the second time in 17 years in another step away from its long-standing ultra-loose monetary policies.

The central bank said in a statement it had set an interest rate of 0.25 percent — up from around zero to 0.1 percent — having ditched its maverick negative rate policy aimed at boosting economic growth in March.

Its decision, announced after a two-day policy meeting, caused the yen to surge briefly before weakening to levels above 153 per dollar.

“Moves to raise wages have been spreading” in Japan while “economic activity and prices have been developing generally in line with the bank’s outlook”, the BoJ said.

If the world’s fourth largest economy moves in line with the bank’s expectations, officials “will accordingly continue to raise the policy interest rate and adjust the degree of monetary accommodation”, it said.

Analysts had …