The Bank of Japan raised interest rates on Wednesday and unveiled a plan to halve its purchases of Japanese government bonds, a move that came as a surprise to markets.
During the two-day policy meeting, the BOJ voted to raise its short-term policy rate target to 0.25% from 0% to 0.1%. Most BOJ watchers had expected the central bank to hold off on tightening until September or October to gather more data.
The yen strengthened to the ¥152 level against the dollar ahead of the announcement as local media reported the possibility of a rate hike. The Japanese currency has made a dramatic comeback from levels near ¥162 in early July.
