Nikkei surges to highest level since 1990 as BOJ holds

The news: Shares in Japan have hit their highest values in 34 years as the Bank of Japan kept its ultra-low interest rate policy intact in its first rate decision of 2024.

The numbers: The Nikkei index rose 1% to its highest level since 1990, and took its year-to-date gains to more than 10%. Conversely, the Japanese yen lost 0.2% against the greenback, to 148.07 per US dollar, adding to the 4.7% devaluation since the start of 2024.

The context: Japan has been the exception to the rule regarding economic growth and monetary policy in recent years. While most economies have been hiking interest rates to tame inflation, the Bank of Japan has continued a massive monetary easing campaign that began in 2013 to counter decades of deflation and to stimulate healthy consumer price growth.

What they said: "Japan's economy is likely to continue recovering moderately for the time being, supported by factors such as the materialization of pent-up demand, although it is expected to be under downward pressure stemming from a slowdown in the pace of recovery in overseas economies," the BOJ said in a statement.