TOKYO, Dec. 19 (Xinhua) -- The Bank of Japan (BOJ) on Friday raised its benchmark interest rate by 25 basis points to 0.75 percent, its highest level in three decades, after a two-day monetary policy meeting.

The move marks the first rate hike since January and also the first under the administration of Prime Minister Sanae Takaichi, who advocated an aggressive fiscal policy and monetary easing.

The rate hike is part of the central bank's latest step towards monetary normalization after the BOJ ended its negative interest rate policy in March 2024. The central bank raised its policy rate in July 2024 and again in January.

Since Takaichi took office, the yen has sharply depreciated amid concerns that her expansionary policy would further deteriorate Japan's fiscal health, prompting the selling of the currency and government bonds. The yield on the benchmark newly issued 10-year government bond -- a key indicator of long-term interest rates -- is edging closer to 2 percent.

Market expectations for further rate hikes have intensified as Japan continues to grapple with persistent inflation and negative real interest rates.