As part of its efforts to stop rising costs, Japan’s central banks has raised the cost of borrowing to its highest level in 17 years.
The Bank of Japan ( BOJ) made the decision to increase its short-term policy rate to 0.5 % shortly after the most recent economic data revealed that monthly prices increased the fastest at the fastest pace in 16 months.
Investors around the world were caught off guard by the BOJ’s most recent interest rate increase in July, which also led to a poor US employment record.
The company’s government, Kazuo Ueda, signalled this latest charge climb in advance in a bid to avert another market impact.
According to official figures, core consumer prices in Japan increased by 3 % in December.
The BOJ increased the cost of borrowing last year for the second time in 17 years.
Some of the nation’s largest companies are now making higher wages for their employees to help them manage the rising living costs.
Since the late 1990s, wages in the nation had stabilized as rates increased very carefully or even dropped, causing policy makers to maintain a ultra-loose economic policy until after the crisis.