When is the BoJ rate decision and how could it affect USD/JPY?
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BoJ rate decision Overview
The Bank of Japan (BoJ) will announce its interest rate decision between 03.30 and 05.00 GMT, followed by Governor Kazuo Ueda's press conference at 06.30 GMT.
The BoJ is widely expected to raise interest rates to 0.75% from the current 0.50% at the conclusion of its two-day policy meeting on Friday. This would mark a 30-year high for the policy rate and underscore the central bank's confidence in achieving sustained wage gains and keeping inflation durably around its 2% target.
The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.
How could the BoJ rate decision affect USD/JPY?
USD/JPY trades on a negative note on the day in the lead up to the BoJ interest rate decision. The pair loses ground after data showed a softer-than-expected rise in US Consumer Price Index (CPI) inflation.
A rate hike will likely strengthen the Japanese Yen (JPY) against the US Dollar (USD). The first upside barrier for the pair is seen in the 155.95-156.00 zone, representing the December 18 high and the psychological mark. The next resistance level emerges at the December 9 high of 156.96, en route to the November 21 high of 157.60.
On the other hand, the December 18 low of 155.28 will offer some comfort to buyers. Extended losses could see a drop to the December 17 low of 154.51. The next contention level is located at the November 7 low of 152.82.
Economic Indicator
BoJ Interest Rate Decision
The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.
Read more.Next release: Fri Dec 19, 2025 03:00
Frequency: Irregular
Consensus: 0.75%
Previous: 0.5%
Source: Bank of Japan
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
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* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
