TOKYO — Japan's central bank raised its key interest rate to 0.25 percent from virtually zero today, the first increase in six years, sending the clearest signal yet that the world's second-largest economy has pulled out of a decade-long slump.

The decision, coming at the end of a two-day meeting of the Bank of Japan's policy board, matched the expectations of analysts and investors. It raises the BOJ's overnight discount rate from a level of 0.069 percent — effectively zero.

"Today's decision will contribute to ensuring price stability and achieving sustainable growth in the medium and to long term," the Bank of Japan said in a statement released after the policy board's unanimous 9-0 vote.

In a nod to concerns that higher borrowing costs could stifle Japan's nascent economic comeback, the BOJ emphasized, however, that "very low interest rates will probably be maintained for some time" and that future changes will come gradually.

Raising rates underlines the view Japan has defeated years of spiraling price declines, known as deflation, and is posting a strengthening economic rebound.

In recent weeks several ruling party officials had urged the bank to hold off, worried that the bank would repeat the mistake it made in August 2000, when it lifted borrowing rates prematurely — and choked a recovery.

Finance Minister Sadakazu Tanigaki said earlier today he expects the BOJ's monetary policy to "firmly support the economic recovery."

Higher rates make it more expensive for companies to borrow money to fund expansion.

Economy Minister Kaoru Yosano, one of the few top officials voicing support for higher rates, said before the decision that ending the zero-rate policy is right, but urged the bank to carefully balance its decision against a possible slowdown in the U.S. economy and recent weakness in the Tokyo stock market.

Compared to six years ago, Japan's economy is much stronger, with corporate profits up, unemployment falling to eight-year lows and prices rising. The economy has grown for five straight quarters and forecasts call for up to 3 percent growth this year.

Proponents of a rate hike say it is need to head off inflation as Japan's economy recovers. May's consumer prices rose 0.6 percent for the seventh monthly gain.

Raising rates brings the BOJ in line with central banks in the U.S. and Europe, which are also tightening credit. In June, the European Central Bank raised its key interest rate to 2.75 percent, while the Federal Reserve has lifted the fed funds rate 17 times straight to 5.25 percent.