Japan hikes rates to highest since 2008 as sustained inflation, rising wages signal 'virtuous cycle' in play

The Bank of Japan raised rates by 25 basis points to 0.5%, the highest level since 2008, in response to sustained inflation and rising wages. The decision, in line with expectations from CNBC’s survey, was a split 8-1 vote with board member Toyoaki Nakamura dissenting. The Japanese yen strengthened 0.6% to 155.12 against the dollar, and the Nikkei 225 stock index rose marginally, while the yield on 10-year Japanese government bonds climbed 2.5 basis points to 1.23%.

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