Japan Central Bank Expected to Hike Rates
Friday July 14, 12:39 am ET

Japan Central Bank Leadership Proposes Ending Zero Interest Rate Policy, Report Says TOKYO (AP) -- Japan's central bank chief proposed ending its zero interest rate policy Friday as the bank's policy board debated raising rates for the first time in six years, Kyodo News agency reported.

Analysts and investors generally expect the Bank of Japan to raise a benchmark rate to 0.25 percent when the policy board wraps up a two-day meeting in Tokyo later in the afternoon. The overnight discount rate is now 0.069 percent -- virtually zero.

BOJ Gov. Toshihiko Fukui proposed ending the zero rate policy during the discussions, Kyodo said, citing unidentified people familiar with the policy board meeting.

Raising rates underlines the view Japan's economy is recovering and has defeated years of spiraling price declines, known as deflation. But it has also raised concerns that higher borrowing costs might undercut the fragile comeback.

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