19.12.2025 11:12
The Bank of Japan raised the short-term interest rate from 0.50% to 0.75%. This decision, which marks the first interest rate increase since January, brings interest rates in Japan to their highest levels since 1995, while the bank indicated that tightening will continue as long as the economic outlook remains positive.
The Bank of Japan (BOJ) unanimously raised the short-term interest rate from 0.50% to 0.75% at its meeting on Friday. This decision, the first interest rate hike since January, brings interest rates in Japan to their highest levels since 1995.
In a statement from the BOJ, it was emphasized that the inflation outlook has strengthened due to wage increases, and confidence has grown that the 2% inflation target will be achieved steadily.
REAL INTEREST RATES WILL REMAIN NEGATIVE
The central bank stated that real interest rates will continue to remain significantly negative following the policy change, while accommodative financial conditions will continue to strongly support economic activity.
INTEREST RATE HIKES MAY CONTINUE
The statement also indicated that if the economic and price outlook progresses in line with forecasts, interest rate hikes may continue. It was noted that despite some vulnerabilities, the Japanese economy is in a moderate recovery process, the labor market remains tight, and corporate profitability is generally at high levels.