The Bank of Japan hiked interest rates to 0.5%, the highest level since October 2008, and pledged to raise rates further if the economy and inflation continue in line with projections. The bank’s pledge to seek more rate hikes sent Japanese government bond yields higher and boosted the yen.

The Bank of Japan has raised short-term interest rates by a quarter point, the highest in 17 years, signalling efforts to normalise monetary policy in response to persistent inflation and increasing wages.