Bank of Japan Poised for Historic Rate Hike to a 30-Year High of 0.75%
The Bank of Japan (BoJ) is widely expected to announce an interest rate hike to 0.75% at the conclusion of its two-day monetary policy meeting tomorrow, December 19, 2025. This would be a 25 basis point increase from the current rate of 0.5% and the highest policy rate in over 30 years.
Key Insights
Meeting Dates: The next BoJ Monetary Policy Meeting is scheduled for December 18–19, 2025. The decision is expected to be announced on December 19 between approximately 11:45 AM and 1:00 PM JST (02:45 to 04:00 UTC).
Rate Expectation: While some reports have mentioned a potential 75 basis point hike, the general market consensus and economists polled by Reuters anticipate a 25 basis point increase to 0.75%.
Reasoning: The move is driven by persistently high inflation, which has been above the central bank's 2% target, and strong indications of sustained wage growth in Japan.
Market Impact: This normalization of policy marks the end of an era of ultra-low interest rates and could lead to significant volatility in global financial markets, including a potential appreciation of the yen and stock market sell-offs.