JPY & PHP - Markets & outlook
Japanese yen - JPY:
December 22, 2025: Key Developments Affecting the Japanese Yen (JPY)
1. Bank of Japan Raises Interest Rates to 0.75%: On December 19, 2025, the Bank of Japan increased its benchmark short-term interest rate by 0.25 percentage points to 0.75%, marking a 30-year high. This move aims to curb persistent inflation, which stood at 3% in November, exceeding the BOJ's 2% target. (apnews.com)
2. Introduction of Quantitative Tightening Plan: The BOJ announced a two-year quantitative tightening plan, reducing government bond purchases by approximately 400 billion yen per quarter. This strategy is expected to decrease the total holdings of Japanese government bonds by about 7% to 8% by the fiscal year 2026. (economies.com)
3. Persistent Inflation and Wage Growth: Japan's core inflation rate remained at 3% in November, above the BOJ's target. Additionally, wage growth has been robust, with a 2.7% increase in 2024, the highest in three decades. These factors contribute to the BOJ's policy normalization efforts. (btcc.com)
4. Trade Tensions with the United States: The re-election of President Donald Trump has led to the imposition of high tariffs on Japanese imports, including a 24% "reciprocal" tariff on many goods. This escalation in trade tensions has raised concerns about the potential impact on Japan's economy and the yen's stability. (en.wikipedia.org)
5. Potential for Japanese Government Intervention: With the USD/JPY exchange rate approaching critical levels, there is an increased risk of intervention by Japanese authorities to support the yen. The Ministry of Finance may collaborate with the BOJ to stabilize the currency if it depreciates excessively. (investing.com)
Recent Developments in Japanese Yen Policy and Economy:
- What to know about the Bank of Japan's interest rate hike, Published on Thursday, December 18
Philippine peso - PHP:
December 22, 2025
Key Developments Affecting the Philippine Peso (PHP):
1. Anti-Corruption Protests Impacting Investor Confidence: Nationwide demonstrations since September 2025, demanding accountability for alleged corruption in government-funded flood control projects, have raised concerns about political stability and governance. (en.wikipedia.org)
2. IMF's Economic Outlook: The International Monetary Fund forecasts the Philippines' growth to slow to 5.1% in 2025, with inflation projected at 1.7%. This outlook reflects challenges in the global economy and domestic issues. (imf.org)
3. Strengthening of External Buffers: In October 2025, the Philippines reported a US$706-million balance of payments surplus, boosting gross international reserves to US$110.2 billion. This provides a buffer against external pressures on the peso. (context.ph)
4. BSP Signals End of Rate Cuts: On December 11, 2025, the Bangko Sentral ng Pilipinas (BSP) cut interest rates by 25 basis points but indicated that further easing would be limited, aiming to support domestic demand and stabilize the peso. (tradingeconomics.com)
These factors collectively influence the Philippine Peso's performance, reflecting a complex interplay of domestic political events and economic policies.
