The Bank of Japan must raise short-term interest rates to at least 1% by the second half of fiscal 2025 to contain inflation risks, board member Naoki Tamura said on Thursday.

THE Bank of Japan must raise short-term interest rates to at least 1 per cent by the second half of fiscal 2025 to contain upside inflation risks, its board member Naoki Tamura said on Thursday. Read more at The Business Times.

Japan's central bank has raised the cost of borrowing to its highest level in 17 years, as it tries to curb rising prices. The move by the Bank of Japan (BOJ) to raise its short-term policy rate to 0.5% comes just hours after the latest economic data showed prices rose last month at the fastest pace in 16 months.

Stronger wages have contributed to the decision by Japan's central bank to raise rates to about 0.5%. The BOJ reiterated that it may in the future raise interest rates again, if required. View on euro

The Bank of Japan raised interest rates on Friday to their highest since the 2008 global financial crisis, underscoring its confidence that rising wages will keep inflation stable around its 2% target.

The Bank of Japan must raise interest rates to at least 1% by the second half of the fiscal year beginning in April, hawkish board member Naoki Tamura said on Thursday, remarks that pushed up the yen as they reinforced bets of a near-term rate hike.