Key Metrics
10.23
Heat Index-
Impact LevelMedium
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Scope LevelNational
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Last Update2025-12-19
Key Impacts
Positive Impacts (5)
Negative Impacts (7)
Event Overview
The Bank of Japan's decision to increase short-term interest rates reflects a response to rising inflation, driven by higher food prices and the yen's depreciation. The policy adjustment aims to manage economic conditions while maintaining an accommodative monetary environment.
Collect Records
Bank of Japan Raises Short-Term Interest Rate to 0.75%
The Bank of Japan raised its short-term interest rate by 25 basis points to 0.75%, in line with market expectations. The decision was unanimous, and the bank expects real interest rates to remain very low. The bank stated that if economic and price trends align with expectations, it will continue to raise policy rates as the economy and prices improve. Despite the rate hike, the monetary environment remains accommodative, supporting the economy. The Bank of Japan maintained its assessment that the Japanese economy is moderately recovering, despite some weakness, and expects core inflation to continue rising moderately.
Japan's Core CPI Rises by 3.0% in October
In October, Japan's core Consumer Price Index (CPI) rose by 3.0% year-on-year, driven primarily by increases in food prices. This rise has intensified expectations that the central bank may raise policy interest rates in the future to curb inflation. Since April 2022, this inflation indicator has remained at or above the Bank of Japan's 2% target. The depreciation of the yen has led to higher import costs, further contributing to the rise in prices. Japan relies heavily on imports for its food and energy needs.