As of December 18, 2025, the Bank of Japan (BOJ) current policy interest rate is 0.5%.

The market widely expects a 25 basis point rate hike to 0.75% at this week's (December 18-19) monetary policy meeting, which would be the highest level in 30 years (since 1995).
This probability is as high as 94%-95%, with main driving factors including: Japan's core inflation remaining above the 2% target (2025 core CPI is expected to be 2.4%-2.7%).
Strong wage growth (the spring 2026 labor-management negotiations are expected to continue the high increases of 2025).
The previous yen depreciation has led to imported inflation pressures, which need to be curbed through rate hikes.