Bank of Japan Rate Decision Live: The Bank of Japan (BOJ) has raised its key policy rate to 0.75%, its highest level since September 1995. The central bank increased the rate by 0.25 percentage points during its final policy meeting of the year. This move takes the benchmark to a 30-year high, potentially rattling world markets. The BOJ began its final policy meeting of the year Thursday.
For years, Japan kept interest rates near or below zero to fight deflation, even as other major central banks raised rates sharply after the pandemic. But rising inflationary pressures and improving business sentiment have forced the BOJ to shift its stance, despite Japan’s economy shrinking at a 2.3 percent annual rate in the last quarter.
One major trigger for the move is the yen’s persistent weakness. The currency has dropped against the U.S. dollar and other major currencies, making imports such as food, fuel and essential goods more expensive. Higher interest rates could help strengthen the yen by attracting more investment into Japanese markets, as global investors look for better returns on yen-denominated assets.
The latest rate hike also signals a broader policy shift, with the BOJ expected to continue “normalising” interest rates in 2026. Any further tightening could influence global markets, since Japan has long been a source of low-cost capital for investors worldwide. A stronger yen or more rate hikes could affect currency trends, bond markets and investor sentiment across Asia, the U.S. and Europe.
Check for Live updates on the BoJ rate hike and its impact on global markets
