BoJ Poised for Historic Rate Hike to 1995 Levels, Ending Ultra-Loose Era

• Bank of Japan (BoJ) is expected to hike its policy rate by 25 basis points (bps) at its December 18–19 meeting.
• The hike would raise the policy rate from 0.5% to 0.75%, a level not seen in Japan since 1995.
• This move signifies a major departure from nearly three decades of ultra-loose monetary policy.
• The decision is driven by sustained inflation above 2% and the strongest wage growth in decades.
• Global markets are closely watching for potential ripple effects, including the unwinding of the "carry trade."

Why It Matters: BoJ's historic rate hike signals end of decades-long ultra-loose monetary policy.