Japan’s central bank raised its key interest rate to 0.25%, the highest since December 2008, and announced plans to halve its bond-buying pace over two years. 

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The yen strengthened against the dollar, and bank stocks surged nearly 5%. 

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This move signals a shift towards policy normalization under Governor Kazuo Ueda. However, Japanese stocks experienced the worst decline since Black Monday in 1987 on Friday. 

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Across the world, the Bank of England cut rates 25 basis points on easing inflation data.

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British consumer price inflation returned to the BoE's 2% target in May and stayed there in June, down from a 41-year high of 11.1% struck in October 2022.

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This results in British inflation being lower than that of the euro zone, where the European Central Bank reduced rates in June, and the United States, where the Federal Reserve maintained interest rates on Wednesday but hinted at a possible cut in September.

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