The Bank of Japan raised its key interest rate to about 0.5% from 0.25% Friday, noting that inflation is holding at a desirable target level. “The economy is gradually recovering,” BOJ Gov. Kazuo Ueda told reporters after a two-day policy board meeting in Tokyo.

The Bank of Japan is widely expected to raise its benchmark rate Friday by the most in 18 years, in a show of boosted confidence over the sustainability of inflation as it progresses down its normalization path.

Bank of Japan Gov. Kazuo Ueda echoed recent comments that have revived market expectations for imminent policy action.

The Bank of Japan (BoJ) is likely to wait until the summer before it next raises interest rates, according to economists surveyed by Bloomberg.

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

Speaking at a gathering of regional bank executives, Ueda said Japan’s central bank would raise interest rates if improvements in the economy and prices continue

The Bank of Japan had held off hiking rates late last year, preferring instead to wait out any economic surprises from the White House