BOJ raises shortterm policy rate to 0.25 from 00.1
BOJ to halve monthly bond buying to Y3 trln in Q1 2026
Broadening wage hikes, rising services prices behind move
Governor Ueda does not rule out another rate hike this year
BOJ will keep raising rates if inflation on track Ueda

TOKYO, July 31 Reuters The Bank of Japan raised interest rates in a mostly unexpected move on Wednesday and unveiled a detailed plan to slow its massive bond buying, taking another step towards phasing out a decade of huge stimulus.

The decision, which defied dominant market expectations for the BOJ to stand pat on rates, takes its shortterm policy rate to levels unseen since 2008.

BOJ Governor Kazuo Ueda did not rule out another interest rate hike this year and signaled the bank39;s readiness to steadily hike borrowing costs to levels deemed neutral to the economy in coming years.

The hawkish comments pushed the dollar below 151 yen for the first time since March, as markets awaked to the reality that Japan was finally eyeing a fullfledged rate hike cycle.

Japan39;s shift to tighter monetary policy also contrasts sharply with the broad swing to lower interest rates by other major economies, with the Federal Reserve expected to signal later on Wednesday that it will cut rates in September as U.S. price pressures moderate.

If data shows economic conditions are on track, and if such data accumulates, we would of course take the next step, Ueda told a news conference, when asked about the…