US EditionNikkei Jumps 1.5% After Bank of Japan Raises Rates to Highest in 30 Years; All Eyes on Governor Ueda's Presser
The Bank of Japan raised its benchmark rate to 0.75%, the highest in three decades, aiming to control inflation despite signs of economic contraction, experts said.
- On December 19, 2025, the Bank of Japan raised its benchmark rate to 0.75%, the highest in 30 years, and the Nikkei increased 1.3% to 49,629.26, while 10-year JGB yields reached 2%.
- The central bank kicked off its year-end meeting on Thursday, aiming to advance policy normalization begun last year as it maintains a gradual rate-rise stance.
- Governor Kazuo Ueda told Japan's parliament, `Unfortunately, the neutral rate of interest is a concept for which we can only produce an estimate with quite a wide range`, and he warned yield rises were `somewhat fast`; Carl Ang expects an updated neutral-rate estimate after Friday's meeting.
- Higher rates will raise borrowing costs for the Japanese government, increasing fiscal pressure, and could further slow Japan's economy, which contracted 0.6% quarter on quarter and 2.3% annualized in Q3.
- Analysts differ on the terminal rate and timing of the next move; Bank of America expects a 1.5% terminal rate by end 2027 with a possible June hike, while ING favors October and the BOJ pegged a terminal range of 1% to 2.5% earlier this month.
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Japan’s Nikkei Stock Average JGB Yields Hit 2006 High as BOJ Hikes Rates
TOKYO, Dec 19 (Reuters) - Japan's Nikkei share average rose more than 1% on Friday and the 10-year government bond yields hit a 19-year high at 2% after the Bank of Japan raised interest rates to a three-decade high and signaled more policy tightening to come.
Nikkei jumps 1.5% after Bank of Japan raises rates to highest in 30 years; all eyes on Governor Ueda's presser
Japanese stock markets reacted positively to the Bank of Japan's expected interest rate hike, with the flagship Nikkei 225 surging as much as 1.42% following the announcement.
The Bank of Japan raised its key interest rate by 25 basis points to 0.75% on Friday, the highest level since 1995. In addition, policymakers have indicated that further tightening measures are on the horizon.
The Bank of Japan has raised the country's key interest rate to its highest level in thirty years. The central bank aims to combat inflation with the higher borrowing costs. The Bank of Japan also indicated that further increases are in the pipeline if circumstances permit.
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