Asia markets up after BOJ rate hike

December 19, 2025 (MLN): Asia markets moved higher on Friday as investors digested the Bank of Japan’s latest monetary policy decision and tracked positive cues from Wall Street.

Japan’s central bank pushed forward with its long-awaited policy normalization, lifting its benchmark interest rate by 25 basis points to 0.75%. 

Fresh government data released on Friday showed Japan’s headline consumer inflation easing to 2.9% in November. 

Core inflation, which excludes fresh food prices, held steady at 3%, matching market forecasts and indicating persistent underlying price pressures, according to CNBC. 

Japanese equities responded positively to the policy update. The Nikkei 225 rose 1.33%, while the broader Topix index gained 1.06%. Meanwhile, the yen weakened by 0.33% to trade at 156.06 per U.S. dollar.

Commenting on the decision, Ken Matsumoto, Japan macro strategist at Credit Agricole-CIB, noted that the government’s tolerance for higher interest rates appears driven by concerns within the Ministry of Finance over yen depreciation. 

He added that authorities may step into currency markets if the yen weakens sharply during the low-liquidity year-end holiday period.

Elsewhere in the region, South Korea’s Kospi climbed 0.77%, while the tech-heavy Kosdaq surged 1.49%. 

Australia’s S&P/ASX 200 advanced 0.51%. In Greater China, Hong Kong’s Hang Seng index rose 0.59%, and mainland China’s CSI 300 added 0.58%.

U.S. markets provided a supportive backdrop overnight. The S&P 500 rebounded from a four-session losing streak, lifted by softer-than-expected inflation data that reinforced expectations of interest rate cuts in 2026. 

Strong forward guidance from semiconductor giant Micron Technology also boosted sentiment.

The S&P 500 gained 0.79% to close at 6,774.76, while the Nasdaq Composite jumped 1.38% to 23,006.36. 

The Dow Jones Industrial Average edged higher by 65.88 points, or 0.14%, ending the session at 47,951.85.

With central bank policy shifts and inflation trends firmly in focus, investors remain alert to currency movements and interest rate signals across major global economies.

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