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Bank of Japan is poised to raise rates to a 30-year high despite economic weakness
Japan’s central bank on Thursday kicked off its last policy meeting of the year, with expectations that it will raise benchmark interest rates to their highest in 30 years, as it seeks to move ahead with policy normalization set forth last year. The decision, due Friday, could see rates raised to 0.75% — highest since 1995 — with data from LSEG showing an 86.4% probability of a hike by the Bank of Japan. A rate hike will likely strengthen the yen against the dollar, and contain inflation, which has run above the BOJ’s target for 43 straight months. But it could further slow a weak Japanese economy that ... (full story)
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Azkilleur
Dec 18, 2025 5:58pm
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Japans central bank on Friday raised its policy rate to a three-decade high, marching ahead with its policy normalization, as inflation has stayed above its target levels for nearly four years now. The Bank of Japan raised benchmark rates by 25 basis points to 0.75%, their highest level since 1995, and in line with expectations of economists polled by ...
At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period: The Bank will encourage the uncollateralized overnight call rate to remain at around 0.75 percent. In accordance with the change in the guideline for money market operations, the Bank decided, by a unanimous vote, to change the interest rates applied to its measures. Interest rate applied to the complementary deposit facility The interest rate applied to the complementary deposit facility (the interest rate applied to current account balances held by financial institutions at the Bank, excluding required reserve balances) will be 0.75 percent.
Decision at the December 2025 MPM It is highly likely that the mechanism in which both wages and prices rise moderately will be maintained. The likelihood of realizing the baseline scenario that underlying CPI inflation will be at a level that is generally consistent with the price stability target of 2 percent in the second half of the projection period of the October 2025 Outlook Report has been rising. While uncertainties remain, they have declined. It is highly likely that firms will continue to raise wages steadily next year, following the solid wage increases this year. The risk of firms' active wage-setting behavior being interrupted is low. BOJ: JAPAN'S REAL RATE IS AT SIGNIFICANTLY LOW LEVEL BOJ: TO RAISE RATES IN LINE WITH ECONOMIC, PRICE IMPROVEMENT BOJ: ACCOMMODATIVE CONDITIONS TO KEEP SUPPORTING ECONOMY
The Bank of England is expected to lower interest rates on Thursday after a sharp slowdown in inflation and a weakening in economic growth, but a string of further cuts in 2026 looks unlikely given Britain's lingering price pressures. Investors think the BoE will reduce its benchmark rate to 3.75% from 4% for a fourth cut of 2025, welcome news for finance ...