The Bank of Japan raised interest rates and projected that inflation will remain around its 2% target in the coming years, indicating its determination to gradually unwind a decade of extensive monetary stimulus.
The nine-member board voted 7-2 to increase the overnight call rate target from 0% to 0.1%.
Following the Bank of Japan’s second interest rate hike in 17 years, the yen strengthened against the dollar.
Asian stock markets rose amid growing optimism for a reduction in US borrowing costs.
Major markets including Hong Kong, Shanghai, Sydney, Seoul, Singapore, Mumbai, Wellington, Bangkok, Manila, and Jakarta advanced, shrugging off a sell-off in Big Tech after Microsoft reported results that showed its key cloud computing unit fell short of expectations.
This followed last week’s disappointing results from Tesla and Alphabet, which heightened concerns about the leading tech companies that have driven market rallies this year.
On Wall Street, the Dow Jones Industrial Average increased by 0.5% to 40,743.33, while the S&P 500 fell by 0.5% to 5,436.44, and the Nasdaq Composite dropped by 1.4% to 17,147.42.
The yield on benchmark 10-year US Treasury bonds stood at 4.17%, unchanged from late Monday and down from 4.70% in April.
