The Bank of Japan raised interest rates to the highest level since October 2008 as the economy makes steady progress toward the bank’s goal of stable 2% inflation and wage-backed growth.

Tokyo stocks opened higher Friday after an overnight rise on Wall Street, but gains were limited as investors were cautious ahead of

If its outlook is met, "the bank will accordingly continue to raise the policy interest rate and adjust the degree of monetary accommodation", it added.

The Bank of Japan is expected to raise interest rates on Friday barring any market shocks when U.S. President-elect Donald Trump takes office, a move that would lift short-term borrowing costs to levels unseen since the 2008 global financial crisis.

Consumer inflation in Tokyo likely accelerated in January, underlining persistent pressure on living costs, a Reuters poll showed on Friday.

The Bank of Japan has raised its key interest rate to about 0.5% from 0.25%, noting that inflation is holding at a desirable target level.

TOKYO (AP) — The Bank of Japan raises its key interest rate to about 0.5%, citing stronger wages and inflation.

TOKYO (AP) — The Bank of Japan raises its key interest rate to about 0.5%, citing stronger wages and inflation. Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

The Bank of Japan raised interest rates on Friday to their highest since the 2008 global financial crisis, underscoring its confidence that rising wages will keep inflation stable around its 2% target.

The core consumer price index (CPI) in Tokyo, a leading indicator of nationwide price trends, likely rose 2.5% year-on-year in January after a 2.4% gain in December, the median forecast of 16 economists showed.

The bank's promise to seek more rate hikes sent Japanese government bond yields higher. The policy-sensitive two-year JGB yield briefly reached 0.725%, the highest level since October 2008, while the 10-year JGB yield jumped to 1.235%.