- The Bank of Japan raised its key interest rate to 0.75%, the highest in 30 years, during its December meeting.
- Policymakers anticipate continued wage increases in 2026 and will monitor the impact of rising rates on the economy.
- The Bank of Japan is currently assessing how the December rate hike affects household finances and corporate profits.

A: Hey Hana! Did you hear about what the Bank of Japan was talking about?

B: No, Kenji! What's up? Tell me!

A: Basically, they were looking really closely at interest rates. Remember those government bonds?

B: Yeah, vaguely! What about them?

A: They also talked a lot about wages. Seems like companies will probably keep raising them this year.

B: Wow, really? That’s good news, right?

A: It is! But they also raised their key interest rate a little - to the highest level in like, thirty years!

B: Seriously? That’s a big deal!

A: It is! One person said interest rates might get pretty high, so they need to watch how it affects everything.

B: Makes sense. I noticed the yen was getting weaker too, didn’t you?

A: Yep! Someone even said raising rates could help control inflation and maybe keep those long-term interest rates down.

B: So, a bit of a complicated situation?

A: Exactly! They haven’t changed anything recently though. They’re just checking how the last rate hike is affecting people’s money and company profits.

B: Ah, so they're being careful. Got it! Thanks for explaining!