The Bank of Japan has cast off its long-standing negative interest rate regime and tightened monetary policy for the first time in over a decade in a momentous shift for one of the world’s largest economies.

The central bank’s board, led by governor Kazuo Ueda, raised the target policy rate to a range of zero to 0.1 per cent from minus 0.1 per cent, where it stood for eight years as part of a policy effort to encourage bank lending and reinflate the economy.