Bank of Japan raises interest rates for first time in 17 years

Japan’s Nikkei 225 index ended above 40,000 on March 19 after the country’s central bank raised interest rates for the first time since 2007.

The Bank of Japan officially ended its negative interest rate policy, hiking rates for the first time in 17 years to 0 per cent to 0.1 per cent from -0.1 per cent. The bank also abolished its yield curve control policy, marking a historic shift in policy, CNBC reports.

Japan’s Nikkei 225 whipsawed following the news but ended the day 0.66 per cent higher at 40,003.60. The broader Topix closed 1.06 per cent higher at 2,750.97.

In another monetary policy meeting, the Reserve Bank of Australia held its benchmark rate at 4.35 per cent for the third meeting in a row.

“While recent data indicates that inflation is easing, it remains high,” the bank said in a statement, adding that its board expects that it will be “some time yet” before inflation comes down to the RBA’s target range of 2 per cent-3 per cent.