🇯🇵 Bank of Japan Set for a Rate Hike: What Markets Are Watching
The Bank of Japan (BoJ) is widely expected to raise its policy rate by 25 bps, from 0.50% to 0.75%, at the December 18–19, 2025 meeting.
It would be the first hike since January, and recent Reuters surveys show a strong majority of economists expect this move.
🔍 Why the BoJ Is Ready to Hike
Inflation above 2% for over three years, while real rates remain very low.
A weak yen, raising concerns about imported inflation.
The BoJ wants to signal normalization while keeping policy gradual and data-driven, avoiding firm commitments on a “neutral rate,” which it sees as highly uncertain.
📉 What’s Happening in the Bond Market
Japanese government bond (JGB) yields have moved sharply higher:
the 10-year JGB has reached around 1.97%, the highest level in nearly 18 years.
Governor Ueda noted the move has been “somewhat rapid,” but the BoJ is reluctant to intervene unless market moves become panic-driven.
📊 Impact on Markets and Crypto
Short term (risk):
higher BoJ rates and a potentially stronger yen could reduce global risk-on appetite
less attractive carry trades may put pressure on volatile assets, including crypto
Medium term (opportunity):
if the BoJ communicates gradualism clearly, it could reduce macro uncertainty and help stabilize Asian markets
👀 Key Things to Watch at the Meeting
1️⃣ Confirmation of the 0.75% hike and the tone of forward guidance
2️⃣ Comments on yen strength, wages, and inflation
3️⃣ Any hints of a path toward 1% rates in 2026, which some Reuters surveys suggest
Takeaway:
Japan is slowly exiting ultra-easy policy. The pace — not the hike itself — will be what markets and crypto react to most.
