The Bank of Japan raised its key interest rate and revealed plans to halve its bond purchases in actions that underscore its determination to normalize its policy.

The BOJ raised its key interest rate to about 0.25% from a range of 0 to 0.1%, according to its announcement Wednesday. It also said it would cut its monthly bond-buying rate to about ¥3 trillion ($19.6 billion) by the first quarter of 2026. The recent pace of purchases has been about twice that amount.

Both the gen and stock prices saw turbulence immediately after the decision, with the Japanese currency falling slightly to around 153.03 against the dollar at 14:34 local time and the Topix stock index rising about 0.6%, led by bank earnings.