Bank of Japan ends negative interest rate policy

The Bank of Japan (BOJ) on Tuesday decided to end its negative interest rate policy and yield curve control policy, marking a major shift away from the long-running monetary easing that Japan has seen over the past decade to put an end to deflation.

After a two-day policy meeting, the central bank's policy board decided to guide short-term rate to a range of zero to 0.1 percent, up a fraction from minus 0.1 to zero percent, introducing a rate hike for the first time in 17 years since February 2007.

The BOJ also scrapped its yield curve control policy of keeping 10-year Japanese government bond yields at around zero percent to maintain accommodative financial conditions.

The central bank introduced negative rates and yield curve control in 2016, which had been a symbol of the BOJ's more-than-decade long ultraloose monetary stimulus.

The widely expected move on Tuesday follows robust pay increases that have heightened the BOJ's confidence that a healthy wage-price cycle is taking root in Japan, and mild inflation will continue.