The Bank of Japan raised interest rates on Friday to their highest since the 2008 global financial crisis, underscoring its confidence that rising wages will keep inflation stable around its 2% target.

Further deliberations are expected to be required for the Bank of Japan to explore future interest rate hikes, with its key policy rate having approached the highest level in three decades, threatening flagging consumption.

The solid inflation data support the case for the Bank of Japan to raise interest rates on Friday, a move widely anticipated by markets and economists.

The Bank of Japan is expected to raise interest rates on Friday to levels unseen since the 2008 global financial crisis, as a broad worldwide stocks rally calms policymakers' fears U.S. President Donald Trump's tariff threats could upend markets.

Japan's central bank has increased the cost of borrowing to its highest level in 17 years after consumer price rises accelerated in December. The move by the Bank of Japan (BOJ) to raise its short-term policy rate to "around 0.

The Bank of Japan increased interest rates on Friday to their highest in 17 years and signalled more hikes to come, sending the yen higher against the dollar.

The remarks, which echo those made by BOJ Deputy Governor Ryozo Himino on Tuesday, pushed up the yen as markets continued to price in the chance of a rate hike at the bank's next policy meeting on Jan. 23-24.

The pace of interest rate cuts has been the focus for much of the world, but in Japan, things are going in the opposite direction. The BOJ just hiked its key policy rate to its highest level in 17 years,