Bank of Japan scraps radical policy, makes first rate hike in 17 years

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Macro Matters
Bank of Japan scraps radical policy, makes first rate hike in 17 years

By Leika Kihara
March 19, 20245:27 AM EDT • Updated 2 hours ago

Summary
• BOJ sets new short-term rate target in 0-0.1% range
• BOJ to apply 0.1% interest to reserves to nudge up rates
• Board votes to ditch bond yield control, risky asset buying
• BOJ expects ultra-easy conditions to stay for time being
• BOJ may hike rates if trend inflation heightens further

TOKYO, March 19 (Reuters) - The Bank of Japan (BOJ) ended eight years of negative interest rates and other remnants of its unorthodox policy on Tuesday, making a historic shift away from its focus on reflating growth with decades of massive monetary stimulus.

While the move was Japan's first interest rate hike in 17 years, it still keeps rates stuck around zero as a fragile economic recovery forces the central bank to go slow on further rises in borrowing costs, analysts say.

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