The Nikkei 225 index closed higher on Friday, December 19, 2025, rising by around 1.16% to 49,568. This gain attracted attention because it occurred amidst news of a Bank of Japan (BOJ) interest rate hike, which typically depresses the stock market.

The key factor: although the BOJ raised interest rates 25 bps to 0.75%, its policy tone remained cautious and gradual, so the market assessed that further increases would not be aggressive. This meant that investors felt the risk of a "painful" tightening for the economy was not yet too great.

Furthermore, the yen's weakening following the BOJ's decision was a positive boost for Japanese stocks, particularly export-oriented companies. A weaker yen typically makes a company's overseas earnings appear larger when converted to yen, thus improving sentiment toward exporter stocks. Globally, the market mood was also helped by risk-on sentiment after cooler US inflation data fueled hopes of further easing in the US interest rates. Consequently, global markets tended to be positive, supporting Japanese stock movements.

In conclusion, the Nikkei was supported by a combination of the BOJ's non-aggressive policies, a weakening yen, and improving global sentiment—keeping the Japanese stock market strong despite rising interest rates. (az)

Source: Newsmaker.id