The Bank of Japan (BoJ) board members decided to raise the short-term interest rate by 25-basis-point (bps) to 0.75% from 0.50% following the conclusion of its two-day monetary policy review meeting on Friday.
The decision came in line with the market expectations.
The Japanese central bank raised benchmark interest rates to its highest in 30 years, as it seeks to move ahead with policy normalization set forth last year.
Market reaction to the BoJ policy announcements
USD/JPY edges higher above 156.00 in an immediate reaction to the BoJ rate decision. The pair is up 0.28% on the day, as of writing.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.01% | -0.00% | 0.25% | 0.02% | 0.00% | 0.08% | 0.09% | |
| EUR | 0.01% | 0.01% | 0.26% | 0.03% | 0.02% | 0.09% | 0.10% | |
| GBP | 0.00% | -0.01% | 0.27% | 0.02% | 0.00% | 0.08% | 0.09% | |
| JPY | -0.25% | -0.26% | -0.27% | -0.23% | -0.25% | -0.19% | -0.17% | |
| CAD | -0.02% | -0.03% | -0.02% | 0.23% | -0.02% | 0.04% | 0.06% | |
| AUD | -0.01% | -0.02% | -0.01% | 0.25% | 0.02% | 0.07% | 0.08% | |
| NZD | -0.08% | -0.09% | -0.08% | 0.19% | -0.04% | -0.07% | 0.00% | |
| CHF | -0.09% | -0.10% | -0.09% | 0.17% | -0.06% | -0.08% | -0.00% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
This section below was published on December 19 at 00:34 GMT as a preview of the Bank of Japan Interest Rate Decision.
BoJ rate decision Overview
The Bank of Japan (BoJ) will announce its interest rate decision between 03.30 and 05.00 GMT, followed by Governor Kazuo Ueda’s press conference at 06.30 GMT.
The BoJ is widely expected to raise interest rates to 0.75% from the current 0.50% at the conclusion of its two-day policy meeting on Friday. This would mark a 30-year high for the policy rate and underscore the central bank’s confidence in achieving sustained wage gains and keeping inflation durably around its 2% target.
The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.
How could the BoJ rate decision affect USD/JPY?
USD/JPY trades on a negative note on the day in the lead up to the BoJ interest rate decision. The pair loses ground after data showed a softer-than-expected rise in US Consumer Price Index (CPI) inflation.
A rate hike will likely strengthen the Japanese Yen (JPY) against the US Dollar (USD). The first upside barrier for the pair is seen in the 155.95-156.00 zone, representing the December 18 high and the psychological mark. The next resistance level emerges at the December 9 high of 156.96, en route to the November 21 high of 157.60.
On the other hand, the December 18 low of 155.28 will offer some comfort to buyers. Extended losses could see a drop to the December 17 low of 154.51. The next contention level is located at the November 7 low of 152.82.
Economic Indicator
BoJ Press Conference
The Bank of Japan (BoJ) holds a press conference at the end of each one of its eight scheduled policy meetings. At the press conference the Governor of the BoJ communicates with media representatives and investors regarding monetary policy. The Governor talks about the factors that affect the most recent interest rate decision, the overall economic outlook, inflation, and clues regarding future monetary policy. Hawkish comments tend to boost the Japanese Yen (JPY), while a dovish message tends to weaken it.
Read more.
Next release:
Fri Dec 19, 2025 06:30
Frequency:
Irregular
Consensus:
–
Previous:
–
Source:
Bank of Japan
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
Source: https://www.fxstreet.com/news/when-is-the-boj-rate-decision-and-how-could-it-affect-usd-jpy-202512190034
