Important! At 2:30 PM, Bank of Japan Governor Kazuo Ueda will hold a press conference!!

Bank of Japan Governor Kazuo Ueda will hold a press conference today (December 19, 2025) at around 2:30 PM Beijing time, which corresponds to around 3:30 PM Tokyo time.

📝 Key information from today's meeting

This press conference is to explain the latest decision made by the Bank of Japan at the monetary policy meeting that concluded this morning.

• Interest rate decision: an increase of 25 basis points

The Bank of Japan has decided to raise the policy rate (the uncollateralized overnight call rate) from approximately 0.5% to approximately 0.75%. This is the highest level since September 1995.

• Voting results: The committee voted unanimously.

The interest rate hike decision was unanimously approved by the policy committee with a vote of 9:0.

• Main reasons for the interest rate hike

The central bank assesses that the mechanism for wage and price increases to rise moderately in sync will be maintained, and the likelihood of achieving the 2% inflation target is increasing. At the same time, external uncertainties from the U.S. economy and trade policies have decreased.

• Market's immediate reaction

As this interest rate hike has been fully anticipated by the market, the financial market reacted relatively calmly after the resolution was announced. The yen against the dollar rose briefly before retreating.

🎯 Why the afternoon press conference is worth attention

Currently, the market's focus has completely shifted from 'whether to raise interest rates' to the future policy path of the Bank of Japan. Therefore, the governor's speech in the afternoon will be key to influencing the market. Analysts mainly focus on the following points:

· Future interest rate hike guidance: The market expects the central bank to adopt a gradual and predictable approach to interest rate hikes. Whether the governor will hint at the possible timing of the next interest rate hike (currently, the market expects it may be mid-2026) will be a core focus.

· Views on neutral interest rates: Will the governor discuss the potential endpoint of policy rates (i.e., 'terminal rate'), which could affect the market's expectations for long-term interest rate levels?

· Impact on the yen exchange rate: Analysts believe that if the governor's statements fail to signal a more 'hawkish' (i.e., faster tightening) stance than the market expects, the yen may continue to be under pressure.