BoJ rate hike: What does the Bank of Japan's interest rate decision mean for the Indian stock market?
Published on 19/12/2025 09:57 AM
On expected lines, the Bank of Japan, on Friday, December 19, raised its key policy rate by 25 basis points (bps) to 0.75%. The decision is remarkable as the current benchmark rate in Japan is now at its highest level since September 1995- a 30-year high.
The Bank of Japan has kept interest rates near or below zero for years to counter deflation. Even after the COVID pandemic, when global central banks started raising rates, Japan kept its rates intact.
However, mounting inflationary pressures forced the BOJ to shift its stance. After 17 years, the BoJ ended its era of negative interest rates on March 19, 2024, when it raised rates to a range of 0 to 0.1% from minus 0.1% earlier. Then again, rates were raised on July 31, 2024, to 0.25%. On January 24 this year, the BoJ raised rates to 0.50% and on December 19, rates were elevated to 0.75%.
Track the Bank of Japan Rate Decision Live Updated Here
After the BoJ interest rate decision, the Sensex jumped over 500 points, and the Nifty 50 reclaimed 25,970 on the upside, indicating that the policy decision was largely discounted in the market.
Japan's 10-year bond yield was almost 2% up at 1.9% around 9:55 am.
"It was almost certain that the BoJ would raise rates by 25bp and, therefore, such a decision is unlikely to impact the market. What the market is looking for is the commentary from the Japanese central bank regarding future rate action in the context of inflation in Japan," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
(This is a developing story. Please check back for fresh updates.)
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stories by Nishant Kumar
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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