BOJ to Raise Policy Rate to 0.5 Pct

Tokyo, Jan. 23 (Jiji Press)--The Bank of Japan will raise its policy interest rate to 0.5 pct at a two-day policy-setting meeting through Friday, the first rate hike since last July, it was learned Thursday.

The additional hike will take the policy rate to its highest level since October 2008.

The move is believed to reflect expectations for large wage increases in this year's "shunto" spring labor-management negotiations, following last year's hikes, as well as the lack of financial market turmoil following the inauguration of U.S. President Donald Trump.

Trump, who took office on Monday, has said that his administration will consider tariffs on Mexico and Canada. But he stopped short of imposing such tariffs on the first day of his new administration.

The BOJ is growing more confident about wage hikes in this year's shunto, a key factor in the Japanese central bank's upcoming rate decision.

[Copyright The Jiji Press, Ltd.]