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.

The Bank of Japan raised interest rates on Friday to their highest since the 2008 global financial crisis and revised up its inflation forecasts, underscoring its confidence that rising wages will keep inflation stable around its 2% target.

The Bank of Japan on Friday raised the benchmark rate by 0.25 percentage points to 0.5 per cent. Consumer price inflation data for December was also released. Wit