TOKYO (Reuters) - The Bank of Japan raised interest rates on Friday in a widely expected move, reflecting its growing optimism that wages will continue rising and keep inflation sustainably around its 2% target.

The board decided to raise the BOJ's short-term policy rate to 0.5% from 0.25% by an 8-1 vote. Board member Toyoaki Nakamura dissented to the decision.

BOJ Governor Kazuo Ueda is scheduled to hold a press conference at 3:30 p.m. (0630 GMT) to explain the policy decision.