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,

Analysts at BBH said: “Two-day Bank of Japan meeting ends Friday with an expected 25 bp hike to 0.5%. Markets have firmed up the odds of a hike over the past week to around 85% after BOJ officials expressed more confidence on wage growth gathering momentum.”

The board decided to raise the BOJ's short-term policy rate to 0.5% from 0.25% by an 8-1 vote. Board member Toyoaki Nakamura dissented to the decision.

The yen strengthened and Japanese government bond yields rose to fresh multi-year highs on Friday after the Bank of Japan hiked interest rates as expected and raised its inflation forecasts, reinforcing views it will push rates up again.