After eight years of negative interest rates and a 17-year period without any increase in rates, the Bank of Japan (BoJ) is making a significant shift from its prior policy.
This move is aimed at spurring growth and revitalizing an economy that has been largely stagnant for decades.
The BoJ is adjusting its short-term interest rates from the previously negative 0.1% to a range of "around zero to 0.1%."
Following the announcement, the Nikkei share average rose. Meanwhile the yen fell 0.99% to the US dollar.
The Nikkei is a stock market index for the Tokyo Stock Exchange (TSE). One of the most widely recognized indicators of the Japanese stock market's performance, it is a key indicator of the Japanese economy.
The index is composed of 225 top-rated companies listed on the TSE, representing a broad spectrum of industries.