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BBC HomepageSkip to contentAccessibility HelpYour accountLiveNotificationsHomeNewsSportWeatheriPlayerSoundsBitesizeMore menuMore menuSearch BBCHomeNewsSportWeatheriPlayerSoundsBitesizeCBBCCBeebiesFoodClose menuBBC NewsMenuHomeIsrael-Gaza warCost of LivingWar in UkraineClimateUKWorldBusinessPoliticsCultureMoreTechScienceHealthFamily & EducationIn PicturesNewsbeatBBC VerifyDisabilityBusinessMarket DataEconomyYour MoneyCompaniesTechnology of BusinessCEO SecretsArtificial IntelligenceJapan finally raises interest rates as inflation wish comes truePublished25 minutes agoShareclose panelShare pageCopy linkAbout sharingImage source, Getty ImagesImage caption, Japan has been hoping to see inflation for decadesBy Peter HoskinsBusiness reporterJapan’s central bank has raised the cost of borrowing for the first time in 17 years. The Bank of the Japan (BOJ) increased its key interest rate from -0.1% to a range of 0%-0.1%. It comes as wages have jumped after consumer prices rose.In 2016, the bank cut the rate below zero in an attempt to stimulate the country’s stagnating economy. The hike means that there are no longer any countries left with negative interest rates.Expectations that the BOJ would finally raise rates had been growing since governor Kazuo Ueda took office in April last year.The latest official figures showed that even though the rate of price rises has been slowing, Japan’s core consumer inflation held at the bank’s 2% target in January.The decision to finally hike rates hinged on the country’s major corporations increasing wages for their workers to help them cope with the rising cost of living, Nobuko Kobayashi from consulting firm EY-Parthenon told the BBC.Earlier this month, Japan’s biggest companies agreed to raise salaries by 5.28% – the biggest wage hike in more than three decades. Wages in the country had flatlined since the late 1990s as consumer prices rose very slowly or even fell. But the return of inflation could be both good and bad news for the economy, Ms Kobayashi says.”Good, if Japan can stimulate productivity and domestic demand. Bad, if inflation stays externally-driven by things like war and supply chain disruptions.”In February, Japan’s main stock index the Nikkei 225 hit an all-time closing high, surpassing the previous record set 34 years ago.This month, the country had avoided falling into a technical recession after its official economic growth figures were revised.The revised data showed gross domestic product (GDP) was 0.4% higher in the last three months of 2023 compared to a year earlier.During the pandemic, central banks around the world slashed interest rates as they attempted to counteract the negative impact of border closures and lockdowns.At the time some countries, including Switzerland and Denmark, as well as the European Central Bank, introduced negative interest rates.Since then central banks around the world, like the US Federal Reserve and the Bank of England, have been aggressively raising interest rates to curb soaring prices.Related TopicsInternational BusinessInflationJapanPayMore on this storyJapan avoids recession as growth figures revisedPublished11 MarchJapan economy gets major boost from weak currencyPublished15 August 2023Can the next Bank of Japan boss fix its economy?Published14 February 2023Cost of living: The shock of rising prices in JapanPublished9 June 2022Top Stories’Only God can change this place’: Haitians see no end to spiralling violencePublished2 hours agoUS reports death of senior Hamas military leaderPublished4 hours agoPutin hails Crimea annexation after claiming election winPublished1 hour agoFeaturesThe Papers: Kate ‘pictured in public’ and ‘key’ Rwanda voteWhy Gillian Anderson found it scary to play Emily MaitlisGaza faces famine during Ramadan, the holy month of fastingIs TikTok really a danger to the West?The highs and lows of First Minister Mark DrakefordBridgerton’s Nicola Coughlan: I hate vanity on screenPredicting Putin’s landslide was easy, but what comes next?No choice for Ukrainians: More Putin means more warThe US Navy’s relentless battle against Houthi attacksElsewhere on the BBCIs there a link between gardening and your gut?Michael Mosley learns how getting grubby in the garden can improve your overall healthAttributionSoundsThe most famous waterway in the Americas is running dryThe Global Story explores the impact on the international shipping industryAttributionSoundsThe moment a Russian warship sank in the Black SeaThe vessel was destroyed by a Ukrainian drone near the Kerch BridgeAttributioniPlayerAre The Beatles Ireland’s greatest band?Steven Cockcroft and Jason Carty explore the Fab Four’s connection with the Emerald IsleAttributionSoundsMost Read1Kate ‘pictured in public’ and ‘key’ Rwanda vote2Why Gillian Anderson found it scary to play Emily Maitlis3Rwanda bill amendments overturned in Commons vote4Trump unable to get $464m bond in New York fraud case5’Only God can change this place’: Haitians see no end to spiralling violence6US reports death of senior Hamas military leader7Potholes leave nations’ roads at ‘breaking point’8Putin hails Crimea annexation after claiming election win9Katie Price declared bankrupt for second time10Prince William back to work on homelessness project
[ad_1] The move marks the first time the country’s central bank has raised interest rates for 17 years.
