BOJ Interest Rate Decision 2026: Nikkei Steady as Japan Holds Rates at 0.75%
The Bank of Japan kept interest rates at 0.75% in January 2026. Discover how the BOJ interest rate decision and Trump's tariff reversal fueled the Nikkei 225 rally.
Japan's central bank stayed the course, and global markets took the cue to rally. The Bank of Japan (BOJ) kept its key interest rate unchanged on Friday, Jan. 23, 2026, meeting investor expectations. Tokyo's Nikkei 225 responded by gaining 0.3% to close at 53,846.87.
BOJ Interest Rate Decision 2026 Nikkei Response
After a surprise hike to 0.75% in December, the BOJ chose a pause this month. According to the official statement, the bank slightly upgraded its economic growth and inflation forecasts. While the pause offers temporary relief, experts like Abhijit Surya from Capital Economics believe the tightening cycle isn't over. They're predicting more hikes in the coming months as underlying price pressures remain firm.
Trump's 'TACO' Effect Calms Geopolitical Tensions
Market sentiment also got a boost from Washington. President Donald Trump called off proposed tariffs on European nations following his controversial calls for U.S. control of Greenland. This pattern of making threats and then pulling back has led traders to adopt the acronym TACO—short for "Trump Always Chickens Out" when markets tank. The S&P 500 rose 0.5% to 6,913.35 on the news.
Bond Market Stability and Safe Haven Shifts
In the bond market, the 40-year Japanese government bond yield slipped to 3.942% after briefly touching a record 4%. Meanwhile, precious metals continued their climb. Gold rose 0.9%, staying near the $5,000 mark as investors hedge against ongoing uncertainty. Crude oil prices also saw modest gains, with Brent crude up to $64.44 per barrel.
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