The Bank of Japan raised its key interest rate to about 0.5% from 0.25% Friday, noting that inflation is holding at a desirable target level. “The economy is gradually recovering,” BOJ Gov. Kazuo Ueda told reporters after a two-day policy board meeting in Tokyo.

In a well-trailed move, the Bank of Japan on Friday raised the policy rate by 0.25 percentage points, taking it to 0.5 per cent — its highest level in nearly two decades.