Bank of Japan Deputy Governor Ryozo Himino said on Thursday that the central bank will continue to raise interest rates if the economy and prices move in line with the bank's forecasts.

The fading shadow of reflationists in the Bank of Japan, and the latest addition to the board of an academic favouring an end to ultra-low interest rates, will likely bring the central bank's thinking closer to global peers taking a more conventional approach on monetary policy.

Some Bank of Japan policymakers began to lose faith in the power of former Governor Haruhiko Kuroda's "bazooka" stimulus less than two years after its introduction, with a decision to ramp up the programme in 2014 made by a narrow 5-4 vote,

All outstanding loans from the central bank's fund-provisioning program to stimulate bank lending are expected to be wiped off its books by March 2028.

The Bank of Japan made a significant step toward shrinking its massive balance sheet last week, while market watchers were fixated on the biggest interest rate increase from the central bank in 18 years.

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.

TOKYO (Reuters) - The Japanese government on Tuesday nominated Waseda University political science and economics professor Junko Koeda to join the Bank of Japan's nine-member board. Koeda would replace former economist Seiji Adachi, whose five-year term ends on March 25.

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.

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 fading shadow of reflationists in the Bank of Japan, and the latest addition to the board of an academic favouring an end to ultra-low interest rates, will likely bring the central bank's thinking closer to global peers taking a more conventional approach on monetary policy.

Bank of Japan board members discussed how to use estimates on the economy's neutral interest rate to determine further hikes in borrowing costs, with one saying the BOJ's policy rate was still far from that level,