Institution: The Bank of Japan's interest rate hike shows it is ready for the normalization of monetary policy

Chris Scicluna, head of European research at Daiwa Capital Markets, said that the Bank of Japan's decision to raise policy interest rates to 0.5% indicates its determination to guide the economy out of decades-long ultra-low interest rates. Although the rate hike itself was widely expected, the real significance lies in the signal sent by the Bank of Japan, indicating that Japan may finally be ready for monetary policy normalization. The current policy rate is at its highest level since 2008 and it seems that the Bank of Japan wants to push it even higher to a new high since 1995. "The Bank of Japan has embarked on a journey which will test how far it can go without shaking up fragile consumer confidence or broader financial stability."