International News 22 December 2025
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Bank of Japan Raises Rates to 30-Year High, Signals Further Tightening
The Bank of Japan (BOJ) raised its benchmark short-term interest rate to 0.75% on Friday, the highest level in nearly 30 years, marking another decisive step away from its long-standing ultra-loose monetary policy. The increase from 0.5%—the first since January—was widely expected and approved unanimously by the policy board. The BOJ struck a slightly more optimistic tone on growth and inflation, reinforcing its view that Japan is on track to achieve a sustainable 2% inflation target, supported by steady wage gains. With real interest rates still deeply negative, the central bank signaled it is prepared to continue tightening if economic and price projections unfold as expected. Despite the rate hike, the yen weakened, as Governor Kazuo Ueda offered no clear guidance on the pace or scale of future increases, stressing that further moves would depend on economic conditions at each meeting. Japan’s 10-year government bond yield rose to a 26-year high, while the dollar climbed above ¥157, reflecting market disappointment over the lack of a more hawkish signal. Ueda noted that even at 0.75%, policy remains below Japan’s estimated neutral rate of 1.0%–2.5%, implying room for additional hikes, though uncertainty remains over timing. The move brings BOJ policy closer to neutral but underscores a cautious, data-dependent path amid concerns over yen weakness, inflation risks, and the impact of higher rates on Japan’s debt-laden economy.
Global Stocks Rise on Tech Rally as Yen Weakens After BOJ Rate Hike
Global equity markets advanced on Friday, led by a strong rally in technology stocks that pushed Wall Street higher. The MSCI global equity index rose 0.71%, while in the U.S. the S&P 500 gained 0.88%, the Nasdaq Composite jumped 1.31%, and the Dow Jones added 0.38%. Technology shares outperformed after Micron Technology issued a strong outlook, prompting Rosenblatt Securities to sharply raise its price target. In Europe, the STOXX 600 climbed 0.37%, marking a record close and posting its strongest weekly gain since late November. Optimism around artificial intelligence–driven growth continued to support risk appetite, although some investors remained cautious after recent market volatility. In currency markets, the Japanese yen weakened sharply after the Bank of Japan raised interest rates to their highest level in three decades, as investors focused on the lack of clear guidance for further tightening. The dollar strengthened to 157.69 yen, while U.S. Treasury yields edged higher across the curve. Commodities also advanced, with oil prices rising on supply disruption concerns linked to potential U.S. action against Venezuelan oil shipments. Meanwhile, silver surged to a record high, supported by strong investment demand and tight supply, while gold prices firmed on expectations that U.S. inflation has peaked and that the Federal Reserve may cut rates in the future.
Russia’s Central Bank Cuts Rates to 16% as Inflation Slows, Growth Remains Weak
The Central Bank of Russia cut its benchmark interest rate by 50 basis points to 16% on Friday, in line with market expectations, as inflation shows signs of easing and economic growth remains subdued amid the country’s focus on the war in Ukraine. The decision coincided with President Vladimir Putin’s annual press conference, where he acknowledged that economic slowdown was partly driven by the central bank’s tight monetary stance aimed at curbing inflation. The bank said underlying price growth indicators declined in November, though inflation expectations have edged higher in recent months. It expects inflation to rise temporarily in early 2026 due to tax hikes before falling back to its 4% target by 2027, while stressing that geopolitical risks continue to pose uncertainty. While most analysts anticipated a 50 bps cut, some market participants had hoped for a larger move, arguing that rates in the 12%–13% range are needed to meaningfully support growth, currently estimated at around 1%. Putin emphasized the central bank’s independence, defending its cautious approach. Official data show inflation at 5.8% as of mid-December, down from 9.5% last year, with Putin projecting 5.6% inflation in 2025. However, public skepticism remains high, with citizens highlighting rising food prices and stagnant wages. Putin acknowledged that headline inflation reflects averages, noting that households heavily exposed to food prices—particularly meat and poultry—are feeling far greater pressure on their budgets.
https://internasional.kontan.co.id/news/bank-sentral-rusia-pangkas-suku-bunga-ke-level-16