They hiked rates and the yen still fell apart. Japan’s 10 year yield just crossed 2% for the first time in over 15 years.

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This is the nightmare scenario for Japan. Rates up, yen weaker, and the one lever they pulled just made it worse. Once the 10 year breaks levels like this, control turns into theater. There really is no clean exit left.

  • USD/JPY jumps to a one-month high as the Yen weakens broadly after the BoJ’s rate hike.
  • BoJ raises its policy rate to 0.75% but signals a cautious approach to further tightening.
  • US consumer sentiment weakens, with expectations slipping from earlier estimates.

The Japanese Yen (JPY) weakens sharply against the US Dollar (USD) on Friday as the Yen slumps across the board following the Bank of Japan’s interest rate decision. At the time of writing, USD/JPY is trading around 157.48, up nearly 1.20%, its highest level since November 21.

Earlier in the Asian session, the BoJ raised its policy rate by 25 basis points (bps) to 0.75%, marking the highest level in roughly three decades. The central bank stated that Japan’s economy has continued to recover at a moderate pace, with tight labor market conditions and solid corporate profits supporting steady wage increases.

https://www.fxstreet.com/news/usd-jpy-jumps-to-one-month-high-as-yen-slides-after-boj-rate-hike-202512191842

https://www.cnbc.com/2025/12/19/bank-of-japan-boj-rate-cpi-inflation-takaichi-ueda.html