The Bank of Japan will likely raise interest rates again around June or July, and seek to hike its policy rate to at least 1.5% in the next two years, former BOJ board member Makoto Sakurai said on Tuesday.

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.

Giving explicit advance signals, in addition to making the Bank of Japan feel boxed in, could breach Japanese law stipulating the nine-member board must debate and sign off on rate decisions at each policy meeting.

Japan's central bank has raised its key interest rate to about 0.5% from 0.25%, noting that inflation is holding at a desirable target level.

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

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

The Bank of Japan has raised short-term interest rates by a quarter point, the highest in 17 years, signalling efforts to normalise monetary policy in response to persistent inflation and increasing wages.

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.

Financial Group Inc., Japan's largest bank by market value, closed at a record high, fueled by optimism for increased lending income due to rising interest rates.

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

China is suffering from deflation, devaluation, capital flight and the loss of foreign investment — all at the same time. Unprecedented, far worse than "Japanification."