The Bank of Japan decided to raise its policy interest rate to roughly 0.25 percent on July 31, marking a dramatic rise from its previous 0 to 0.1 percent.

Following the announcement of the additional hike, the yen saw a brief appreciation to the 151 yen per dollar level in the foreign exchange market.

However, since there had been widespread speculation about the rate hike, the yen immediately depreciated, reaching the 153 yen per dollar level at one point.

A little after 5 p.m. the yen appreciated to the 150-yen level per dollar in volatile trading.

The move is likely to increase interest rates on saving accounts and deposits depending on the financial institution.

It is also possible that variable interest rates for new housing loans may be subject to an increase as early as September, while those who already have loans may see rate increases starting from January next year.

Interest rates on business loans will also rise.

The central bank announced plans to reduce the amount of long-term government bonds it has been purchasing as part of its monetary easing policy.

It said that the BOJ will reduce the monthly purchases of Japanese government bonds to about 3 trillion yen per month from January to March 2026.