The Bank of Japan raised rates Wednesday in a surprising and aggressive move that caught the market off guard, delivering a one-two punch of a rate change and a reduction in bond purchases that a week ago was considered highly unlikely.
At its two-day policy meeting, the BOJ voted to increase its short-term policy rate target to 0.25% from a range of 0% to 0.1%. It also said that it would reduce its buying of government bonds through March 2026.
An institution that had recently earned a reputation for being wishy-washy and making missteps instead acted decisively and with resolve.
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