Bank of Japan hikes again and, while mindful of risks, will keep normalizing

key takeaways

• The Bank of Japan (BOJ) announced another interest rate hike on Friday, 24 January, bringing short-term rates to their highest level since 2008.
• While the BOJ is sensitive to potential shocks from overseas, the bank is relatively optimistic about Japan’s economic fundamentals and sees room for additional rate hikes, with real interest rates still negative.