Japan's central bank has raised interest rates to 0.5% following signs of steady growth in the economy.
Japanese consumer spending has picked up recently
It said the decision - only its second interest rate rise in more than six years - had been made because Japan's recovery was likely to continue.
Worries about the US and other overseas economies had also diminished, it said.
In July last year, the bank raised the rate to 0.25% following six years of zero interest rates designed to help the economy recover.
The bank's nine-member monetary policy board voted 8-1 in favour of the latest rise, but said future rises would be made only gradually.
In a statement following the decision, the central bank reiterated that it planned to adjust interest rates gradually.
Many economists now think that another rate rise will not come for at least another six months.
"It reduces the likelihood of further rate hikes going forward," according to Glenn Maguire, chief economist at SG Hong Kong.
The belief that there is unlikely to be another increase soon sent the yen falling against the dollar and the euro.
The currency had initially risen on the first reports that the Bank of Japan governor, Toshihiko Fukui, had proposed a rate rise, but it changed direction shortly after the decision was announced.
The doubling of interest rates still leaves Japan well below the benchmark rates of 5.25% in the US and 3.5% in the eurozone.
Tokyo's Nikkei share average ended down 0.14% but the broader TOPIX index rose 0.2% to its highest finish in more than 15 years.
Banks have been boosted by hopes that rising interest rates will improve their lending margins.