The fading shadow of reflationists in the Bank of Japan, and the latest addition to the board of an academic favouring an end to ultra-low interest rates, will likely bring the central bank's thinking closer to global peers taking a more conventional approach on monetary policy.

Bank of Japan Deputy Governor Ryozo Himino said on Thursday that the central bank will continue to raise interest rates if the economy and prices move in line with the bank's forecasts.

Bank of Japan board members discussed how to use estimates on the economy's neutral interest rate to determine further hikes in borrowing costs, with one saying the BOJ's policy rate was still far from that level,

The Bank of Japan made a significant step toward shrinking its massive balance sheet last week, while market watchers were fixated on the biggest interest rate increase from the central bank in 18 years.

Despite limited developments that would justify a policy shift since December, Japan's central bank nevertheless went ahead to raise interest rates.

The Bank of Japan is likely to have two women on its decision-making board for the first time, marking a modest step toward improving gender diversity at the central bank as it struggles to catch up with global peers.

The BOJ fumbled its communication in December, surprising investors, but then telegraphed Friday's increase so unambiguously that the rate hike was 90% priced in.

Japan's central bank has increased the cost of borrowing to its highest level in 17 years after consumer price rises accelerated in December. The move by the Bank of Japan (BOJ) to raise its short-term policy rate to "around 0.5 per cent" comes just hours after the latest economic data showed prices rose last month at the fastest pace in 16 months.

TOKYO (Reuters) - The Japanese government on Tuesday nominated Waseda University political science and economics professor Junko Koeda to join the Bank of Japan's nine-member board. Koeda would replace former economist Seiji Adachi, whose five-year term ends on March 25.

World shares advanced Friday after U.S. stocks rose to a record and the Bank of Japan raised its key lending rate.

Consumer inflation in the Tokyo metropolitan area picked up slightly in January, government data showed Friday, supporting the Bank of Japan’s plan to pursue more interest-rate increases.

The Japanese yen strengthened against other G-10 and Asian currencies on the prospects of a hawkish tilt to Bank of Japan’s Deputy Governor Himino’s speech this afternoon.