Bank of Japan Governor Ueda Kazuo announced on December 19 that the central bank decided to raise its short-term interest rate from 0.5 percent to 0.75 percent, a 30-year high at its policy meeting. 
 
The BOJ has refrained from additional rate hikes for six consecutive meetings, as it assessed the economic impact of the Trump tariffs. 
 
This time, however, Ueda said that while uncertainty over the tariffs remains, it has diminished. He also noted a high likelihood that solid wage increases will be implemented next year, judging that conditions for an additional rate hike are now in place. 
 
The policy rate rose above 0.5 percent for the first time since 1995.  
 
The BOJ governor says the central bank will closely monitor economic indicators and price trends, adjusting the degree of monetary easing as needed. 
 
Behind the decision to raise interest rates was an effort to correct the excessive weakening of the yen, but after the governor gave no clear guidance on future hikes, the currency weakened further, with the U.S. dollar rising above the mid-156-yen level in afternoon trading.