Asian shares advance after Japan raises its key interest rate to its
highest level in 30 years
[December 19, 2025] By
ELAINE KURTENBACH and CHAN HO-HIM
Asian shares were moderately higher and U.S. futures were mixed after
the Bank of Japan raised its key policy rate Friday to its highest level
in 30 years and U.S. inflation cooled more than expected.
The 0.25 percentage point increase by the BOJ was widely expected. It
took the benchmark rate to 0.75%, the highest since 1995, but still low
compared with other major economies.
In Tokyo, the Nikkei 225 gained 1% to 49,507.21, leading the rise across
Asia's key markets.
Following the BOJ's decision, Japan's benchmark 10-year government bond
yield surpassed the 2% mark for the first time since May 2006. The U.S.
dollar rose to 156.36 Japanese yen from 155.53 yen.
Global investors had been bracing for reactions to the BOJ's move, but
markets appeared to take the decision in stride. The future for the S&P
500 rose 0.1%, while that for the Dow Jones Industrial Average slipped
0.2%.
“The Bank of Japan’s decision to raise interest rates at its meeting
today was clearly signaled ahead of time and therefore came as no
surprise,” Abhijit Surya of Capital Economics said in a report, noting
that “financial markets had almost fully priced in a hike ahead of
today’s meeting.”
Hong Kong's benchmark Hang Seng rose 0.8% to 25,713.56, while the
Shanghai Composite index added 0.4% to 3,890.43.
In Seoul, the Kospi climbed 0.7% to 4,020.55.
Asia’s share gains were also built on optimism over more Fed rate cuts,
after the U.S. on Thursday reported a lower-than-expected 2.7% rise in
inflation for November, leaving potentially more room for the Fed to cut
rates as the U.S. job market slows.
On Thursday, European indexes gained after the Bank of England cut its
key interest rate and the European Central Bank kept its rate steady.
But Thursday’s U.S. inflation update may also not move the needle that
much at the Fed given how noisy economic reports have been following the
43-day U.S. government’s shutdown. The inflation report was delayed
eight days by the shutdown, which also prevented the Labor Department
from compiling overall numbers for consumer prices and core inflation in
October.
The next monthly update on inflation, for December, could provide a
better gauge of what’s actually happening.
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People walk in front of an electronic stock board showing Japan's
Nikkei index at a securities firm Friday, Dec. 19, 2025, in Tokyo.
(AP Photo/Eugene Hoshiko)
 In the U.S. on Thursday, the S&P 500
edged up 0.8% following a four-day losing streak to 6774.76. The Dow
Jones Industrial Average gained 65.88 to 47,951.85, and the Nasdaq
composite rose 313.04 to 23,006.36.
Technology stocks helped lift the U.S. stock market. Micron
Technology, a key maker of memory chips, jumped 10.2% on
stronger-than-expected profit and revenue for the latest quarter
ending November as the company also delivered an upbeat forecast for
upcoming revenue and profit.
But investor concerns over an overblown AI bubble are still clouding
the prospects of some companies which benefited big from the AI
boom. Broadcom and Oracle’s shares had fallen significantly since
last week. Oracle’s shares rose 0.9% on Thursday, while Broadcom’s
added 1.1%.
Nvidia, the chip company that’s become Wall Street’s most
influential because of its immense size, gained 1.8%.
Another winner was Trump Media & Technology Group, which jumped
41.9% to trim some of its steep loss for the year so far, 69.3%
coming into the day. The company, which began with President Donald
Trump’s Truth Social platform and then moved into cryptocurrencies
and various other lines of business, is now moving into nuclear
power.
It’s merging with TAE Technologies in an all-stock deal, and each
company will own roughly half of the combined business.
In other dealings early Friday, U.S. benchmark crude oil lost 16
cents to $55.84 per barrel. Brent crude, the international standard,
shed 21 cents to $59.61 per barrel.
The euro slipped to $1.1715 from $1.1724.
The price of bitcoin rose 3.8% to about $88,000.
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