BOJ Ups Interest Rates for the First Time in Six Years
As widely anticipated, on July 14 the Bank of Japan raised the overnight call rate to 0.25%. This was the first increase in this key rate in six years, and it marked an historic milestone in Japan's efforts to boost the economy and end deflation. The overall impact of the rate hike on the economy was expected to be minimal, however; the BOJ has indicated that interest rates would continue to remain very low. The discount rate, the rate at which the government lends directly to banks, was boosted only 30 points to 0.4%, less than analysts had expected.