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Bank of Japan Poised for Major Rate Hike
19 Dec, 2025
Summary
- Bank of Japan may raise rates to 0.75%, highest since 1995.
- An 86.4% probability suggests a hike is highly anticipated.
- Japan's consumer inflation dropped to 2.9% in November.
Investors across Asia-Pacific markets are closely watching for the Bank of Japan's crucial decision today. Expectations are high for a rate increase, potentially to 0.75% – a level not seen since 1995. Data indicates an 86.4% probability of this historic move.
A rate hike is anticipated to bolster the Japanese yen against the U.S. dollar and help curb persistent inflation. Inflation has remained above the Bank of Japan's target for 44 months straight, making this decision critical for economic stability.
Recent government data revealed a drop in Japan's consumer inflation rate to 2.9% for November. Core inflation, excluding volatile fresh food prices, held steady at 3% from October, aligning with economists' forecasts.
