TOKYO, 18th December, 2025 (WAM) -- The Bank of Japan (BOJ) is widely expected to raise its benchmark interest rate from around 0.50 percent to around 0.75 percent, its highest level in 30 years, at its two-day policy meeting starting Thursday, as inflationary pressures remain elevated due in part to the yen's weakness.
According to Kyodo News, the decision would mark the first rate hike since January and also the first under the administration of Prime Minister Sanae Takaichi.
Monetary tightening raises borrowing costs, slowing consumption and investment, and also helps stabilise prices. The measure would likely strengthen the yen, reducing the cost of imports that have been a major driver of the nation's period of cost-push inflation.
