SINGAPORE, Jan 24 (Reuters) - 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 stably around its 2% target.
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.
QUOTES: NAOYA HASEGAWA, CHIEF BOND STRATEGIST AT OKASAN SECURITIES, TOKYO "The decision was in line with our expectations. We await comments from BOJ Governor (Kazuo) Ueda at his post-meeting news conference. We want to know his outlook for the future rate path, rather than why the BOJ raised rates at this meeting. The market now expects that the BOJ raises rates every six months so we want to know Ueda's view on that."
MATT SIMPSON, SENIOR MARKET ANALYST, CITY INDEX, BRISBANE "The hike may have been expected but in what feels like the first time in a very long time, there were no major downgrades to their economic outlook. This keeps the door open to another 25bp hike by the year-end, and rates to sit at a whopping 0.75%."
TAKAHIRO OTSUKA, SENIOR FIXED INCOME STRATEGIST AT MITSUBISHI UFJ MORGAN STANLEY SECURITIES, TOKYO "The outcome was as expected, but it seems to be a little hawkish with the BOJ raising its inflation forecast. We want to check comments from (BOJ Governor Kazuo) Ueda to confirm the BOJ's stance." KIERAN WILLIAMS, HEAD OF ASIA FX, INTOUCH CAPITAL MARKETS, LONDON "The statement is something of a Rorschach test; hawks are pointing to the reiterations that price risks are skewed to the upside and that the BOJ will continue to hike if the economy evolves in line with the outlook... while doves are clinging to the dovish dissent from Nakamura, negative real wage mentions, notes of caution and the line that easy financial conditions will be maintained."
"The evolution of yen price action throughout the day will depend on the tone adopted by BoJ Governor Ueda at the press conference."
JOSEPH CAPURSO, HEAD OF INTERNATIONAL AND SUSTAINABLE ECONOMICS, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY "They dropped a lot of hints in the media that they might do this, and they'll probably hike again this year, we think they'll probably hike two more times this year. But they might decide to wait quite some time between rate hikes... so we think they'll probably hike again mid-year." (Reporting by Reuters Asia markets team; Editing by Rashmi Aich)
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