Interest rate rises but yen retreats at central bank warning

THE Bank of Japan (BOJ) raised its main interest rate yesterday by a quarter percentage point to 0.50%, the highest in more than a decade, but the yen retreated as the central bank signalled caution on further increases.

The BOJ, whose board voted 8-1 for the rise, said the economy was likely to continue growing and it would make further rate adjustments only gradually.

BOJ governor Toshihiko Fukui, in a news conference, echoed that view and said the central bank does not have specific schedules for future rate hikes, such as consecutive rate rises.