MNI BoJ Review-Dec 2025: +25bps, Uncertainty On Hike Timing

EXECUTIVE SUMMARY: 

• The BoJ hiked rates by 25bps last Friday, in line with the sell-side economic consensus and market pricing. As expected, the BoJ also kept a tightening bias into 2026, as it still views policy settings as accommodative.
• Still, the market came away disappointed on lack of details on the timing around further rate hikes, with yen weakening and JGB yields pushing higher.
• Market pricing has a further 25bps hike priced by around the July meeting next year.
• Part of the market focus will be on whether higher USD/JPY levels brings forward market expectations for the next hike.   

FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK: BOJ Review - Dec 2025.pdf