The Bank of Japan has taken a big step to exit its monetary easing measures. The central bank has decided to raise its short-term interest rate again this year, to around 0.25 percent from roughly 0 to 0.1 percent.

The announcement came on Wednesday at the end of the BOJ's two-day meeting.

The hike was the first since March, when the central bank raised the rate for the first time in 17 years and ended its negative interest rate policy. It has also decided to reduce the pace of its monthly purchases of long-term government bonds.

The BOJ has decided to gradually reduce the amount to around 3 trillion yen, or about 19.5 billion dollars as of the first quarter of 2026.

The central bank has been buying about 6 trillion yen, or roughly 39 billion dollars, of government bonds a month.