The Bank of Japan has increased its benchmark interest rate and announced plans to reduce its bond purchasing program.

What Happened: The BOJ has raised its benchmark interest rate to around 0.25% from the previous range of 0% to 0.1%. The central bank also outlined its roadmap for tapering its bond-buying program.

Despite the rate hike, the BOJ expects real interest rates to remain “significantly negative,” ensuring that “accommodative financial conditions will continue to firmly support economic activity.”

The bank’s fiscal year runs from Apr. 1 to Mar. 31, meaning the 2024 fiscal year will conclude in March 2025.

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Meanwhile, in the U.S., the Federal Reserve has maintained its federal funds rate at 5.25%-5.5% for eight consecutive sessions, with market-implied probabilities suggesting a near-certainty of no rate change in July.

However, as inflation eases and unemployment sees a slight uptick, investors are keen to see if Fed Chair Jerome Powell will hint at a potential rate cut in September during the upcoming FOMC meeting on July 30-31.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote