The Japanese yen weakened against other major currencies in the European session on Friday, after the Bank of Japan raised its benchmark rate by a quarter-point as inflation remains stubbornly above the target.
The policy board decided to hike the uncollateralized overnight call rate to "around 0.75 percent" from "around 0.5 percent."
Previously, the BoJ had lifted the benchmark rate by 25 basis points in January.
Real interest rates are expected to remain significantly negative after the change in the policy rate, and accommodative financial conditions will continue to firmly support economic activity, the bank said.
If economic activity and prices develop as estimated in October, the BoJ will continue to raise the policy rate and adjust the degree of monetary accommodation, the bank said.
The BoJ has left the door open for additional interest rate increases, but the Japanese yen has been under tremendous pressure. BoJ Ueda stated at the press conference, "Will continue to raise policy rate if economy, prices move in line with forecast, in accordance with improvements in economy, prices."
In economic news, data from the Ministry of Internal Affairs and Communications showed that overall consumer prices in Japan were up 2.9 percent on year in November. That was in line with expectations and down from 3.0 percent in October.
On a monthly basis, inflation was unchanged at 0.4 percent.
Core CPI was up 3.0 percent on year - matching forecasts and unchanged from the October reading.
Meanwhile, European stocks were little changed, a day after the European Central Bank and Bank of England issued hawkish signals on the outlook for their rate paths.
After November's U.S. inflation report showed an unexpected decline in price growth, the core PCE price index, widely regarded as the Federal Reserve's preferred inflation gauge, along with the existing home sales report will be in focus later in the day.
Also, the European Union leaders have decided to borrow cash to fund Ukraine's defense rather than use frozen Russian monies.
In the European trading today, the yen fell to a record low of 197.35 against the Swiss franc, nearly a 35-year low of 183.74 against the euro and more than a 17-year low of 209.83 against the pound, from early highs of 195.81, 182.42 and 208.22, respectively. If the yen extends its downtrend, it is likely to find support around 198.00 against the franc, 186.00 against the euro and 212.00 against the pound.
Against the U.S. and the Canadian dollars, the yen slipped to a 9-day low of 156.94 and nearly a 1-1/2-year low of 113.84 from early highs of 155.57 and 112.92, respectively. The yen is likely to find support around 158.00 against the greenback and 115.00 against the loonie.
Against the Australia and the New Zealand dollars, the yen slid to 4-day lows of 103.73 and 90.28 from early highs of 102.86 and 89.73, respectively. The yen may test support near 105.00 against the aussie and 90.00 against the kiwi.
Looking ahead, Eurozone flash consumer confidence for December, U.S. existing home sales for November, U.S. University of Michigan's consumer sentiment for December and U.S. Baker Hughes oil rig count data are slated for release in the New York session.
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Forex News
December 12, 2025 15:14 ET Central bank decisions dominated the economic news flow this week led by the Federal Reserve. Trade data from the U.S. also gained attention. The Canadian and Swiss central banks also announced their interest rate decisions. Inflation data from China was in focus as the country released the latest consumer price and producer price data.