The Bank of Japan (BOJ) recently officially announced that it will raise the policy interest rate by 25 basis points to 0.75%, marking the highest level since the 1990s. This move signifies Japan's complete departure from the long-term zero interest rate framework and sends a clear signal: if the future economic and price trends meet expectations, the rate hike cycle will continue.

The decision to raise rates is supported by solid data. The core logic is that inflation and wages form a virtuous cycle — the core CPI has been above 2% for three consecutive years, and the central bank predicts it can maintain this level through the fiscal year 2027; companies are optimistic about wage negotiations in the spring of 2026, further consolidating domestic demand momentum. At the same time, the long-term depreciation of the yen has pushed up import costs, making interest rate hikes a necessary measure to alleviate imported inflation.

Although the annualized GDP rate shrank by 1.8% in the third quarter of 2025, the BOJ emphasized that this phenomenon is temporary, believing that the fiscal stimulus of 21.3 trillion yen and investment in AI devices will drive an economic rebound in the fourth quarter. It is worth noting that, since the inflation rate remains above the nominal interest rate, Japan's real interest rate remains in negative territory, and the overall monetary environment is relatively loose.

Future policies will continue the tone of “gradual and data-driven.” The market generally expects that there may be another rate hike between April and June 2026, pushing the interest rate up to 1% by mid-year; BNP Paribas predicts that the long-term terminal interest rate may reach 1.5%. Analysts point out that the wage negotiations and retail data in the first half of 2026 will be key to judging the pace of rate hikes, while the interaction of the yen's trend, Japanese bond yields, and global capital reallocation will affect global asset performance next year.

In the cryptocurrency market, following Japan's interest rate hike news, Bitcoin surged temporarily to 87500 dollars. Recent trends have intensified volatility, with a fierce tug-of-war between bulls and bears.