---
title: "INSTANT VIEW-Investors react to BOJ's decision to hike rates"
description: "The Bank of Japan raised interest rates to 0.75%, marking a significant shift from decades of monetary support. Analysts expect short-term JPY volatility and a stronger Nikkei, with focus on BOJ Gover"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/270247522.md"
published_at: "2025-12-19T03:39:36.000Z"
---

# INSTANT VIEW-Investors react to BOJ's decision to hike rates

> The Bank of Japan raised interest rates to 0.75%, marking a significant shift from decades of monetary support. Analysts expect short-term JPY volatility and a stronger Nikkei, with focus on BOJ Governor Ueda's press conference for future guidance. The move is seen as a step towards gradual normalization by 2026-27.

Dec 19 (Reuters) - The Bank of Japan raised interest rates on Friday to levels unseen in three decades, taking another landmark step in ending decades of huge monetary support and near-zero borrowing costs.

As widely expected, the central bank raised short-term interest rates to 0.75% from 0.5% by a unanimous vote.

### COMMENTS

### MASAHIKO LOO, SENIOR FIXED INCOME STRATEGIST, STATE STREET INVESTMENT MANAGEMENT, TOKYO:

“The market may interpret the hike as dovish, causing short-term JPY volatility. Longer-term target of 135–140 remains intact, supported by Fed easing and Japanese investors raising hedging ratios from historically low levels.

“Positioning favours a stronger Nikkei, steeper JGB curve, and weaker yen under Sanaenomics. With the BOJ terminal rate priced at 1.5%, most JGB weakness is already in the market.

“Focus now shifts to (BOJ Governor Kazuo) Ueda’s press conference tone and forward guidance — likely neutral, signalling gradual normalisation into 2026–27 without leaning too dovish or hawkish. Ueda faces a delicate balancing act.”

### Related Stocks

- [8301.JP - Bank of Japan](https://longbridge.com/en/quote/8301.JP.md)

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.