The Federal Reserve isn’t the only central bank that’s been raising interest rates this year. Other central banks around the world have been following suit — including the European Central Bank, the central banks of England, Canada, Australia and Norway. The list goes on.

One major holdout though has been the Bank of Japan. It’s been holding interest rates near zero, despite all the inflation that Japan — and the rest of the world — has been dealing with over the last couple years.

But this week, Japan’s central bank indicated that those days of ultra-low interest rates could be over.

The Bank of Japan basically said it’s allowing the interest rate on long-term government bonds to move around a little more.

“In other words, they allowed 10-year and longer Japanese government bonds to increase in yield, up to about one-half of 1%,” said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott. “They were previously limiting the yield to one-quarter of 1%.”

Now, that’s not the same thing as actually raising interest rates like the Federal Reserve’s been doing.

But the Bank of Japan is sending a signal, per Regina Schleiger, director of central bank research at SGH Macro Advisors. “That they are about to chart a course to follow the same direction as other major central banks, in terms of tightening their rates.”

By letting interest rates go up, the Bank of Japan could make government bonds more attractive to investors.

That could help the country deal with a big problem: the falling value of the yen, said Ulrike Schaede, a professor of Japanese business at UC San Diego.

“These government bonds have to be bought in yen, so the demand for the yen increases, and so then you get a stronger yen,” she said.

A stronger yen can make imports less expensive for Japanese consumers — especially energy imports, which the country relies on.

“Whether that’s coal, or LNG gas, or oil, doesn’t matter — everything has to come in from abroad,” Schaede said.

Higher interest rates can also help Japan combat inflation more generally.

And that could help other countries too, said Kathryn Dominguez, an economics professor at the University of Michigan.

“If all countries are trying to bring down prices, that’s likely to have an impact on global inflation,” she said.

Which could make it easier for other central banks to do their jobs.

“It could be that they will have to raise interest rates by less individually, since all of them are now kind of moving in the same direction,” Dominguez said.

In the meantime, Dominguez added that the Bank of Japan will likely have to start playing catch-up with other central banks next year.

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