Japan's Central Bank Raises Lending Rate
Posted on: Wednesday, 21 February 2007, 09:00 CST
Japan's central bank raised a key lending rate by a quarter-point to 0.5 percent Wednesday, citing signs of an expanding economy.
Only one member of the Bank of Japan's nine-person policy board opposed the increase in its target for short-term rates, the bank said of the first increase since July.
The decision followed growth figures last week that showed Japan's economy grew at its fastest pace in three years, though economists said the most important engine of expansion, consumer spending, remained weak.
But the bank said the weakness seemed temporary, with consumer spending on a moderate increasing trend and Japan's economy likely to continue its moderate expansion with a virtuous circle of production, income and spending in place.
The bank added uncertainties in the U.S. economy were abating.
Even with the latest increase, Japan's benchmark rate is still well below its equivalent in other major nations -- 5.25 percent in the United States and 3.5 percent in the European Union's euro zone.
Source: United Press International
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