Bank of Japan hikes rates for first time since 2007

Tokyo: Japan s central bank pulled the plug Tuesday on its ultra aggressive monetary stimulus programme, hiking rates for the first time since the glo...

Tokyo: Japan's central bank pulled the plug Tuesday on its ultra-aggressive monetary stimulus programme, hiking rates for the first time since the global financial crisis.

The Bank of Japan's outlier policy of negative rates and massive asset purchases was aimed at jump-starting economic growth and price rises after the "lost decades" of stagnation and deflation.

But on Tuesday, following months of speculation, the BoJ finally changed its policy rate range from -0.1 percent to between zero and 0.1 percent, in its first hike since 2007.

Officials "assessed the virtuous cycle between wages and prices" and concluded that "the price stability target of two percent would be achieved in a sustainable and stable manner", it said.

The move will make loans more expensive for consumers and businesses, but banks will be able to earn more money from lending.