Bank of Japan Hikes Rate

Bank of Japan raised its key discount rate today by 0.75 percentage point to 6%, a central bank official said.

It was the fifth increase in the rate, the level at which the central bank lends to commercial banks, since May, 1989, when it stood at a record low 2.5%. The last hike was a one percentage point hike on March 20.

The Japanese central bank’s move makes it more difficult for the U.S. Federal Reserve to ease monetary policy because Japanese investments would become more attractive, leading to further declines in the dollar.

Tokyo’s Nikkei stock index inched up 34.68 to 24,929.47 by midday today, attempting to draw some hope from talk that the latest interest-rate rise may be the last.