Japan’s equities and bond yields surged after the central bank lifted its policy rate to the highest level in three decades, a move taken as inflation has remained persistently above target for nearly four years. The Bank of Japan raised benchmark rates by 25 basis points to 0.75%, the highest since 1995, in line with expectations from economists. Government data released Friday showed Japan’s consumer inflation eased to 2.9% in November, while core inflation excluding fresh food stayed at 3% in October, matching consensus forecasts.

Japanese stocks responded positively, with the Nikkei 225 rising 1.03% to close at 49,507.21 and the Topix gaining 0.8% to end at 3,383.66. The yen weakened 0.33% to 156.06 per dollar. Bond yields also climbed sharply, with the 10-year government bond yield rising more than 3 basis points to 2.022%, its highest level since 1999, while the 20-year yield increased over 2 basis points to 2.962%, according to data.

Ken Matsumoto said the government’s acceptance of higher rates appeared driven by concerns within the Ministry of Finance over yen depreciation. He added that if the yen weakens significantly during the year-end and New Year holidays, when liquidity is thin, authorities are likely to intervene actively in the currency market. Elsewhere in Asia, South Korea’s Kospi advanced 0.65% to 4,020.55, while the Kosdaq jumped 1.55% to 915.27, as the Bank of Korea confirmed it was selling dollars to smooth volatility in the won, which recently hit its weakest level since 2009 at around 1,479 per dollar.

Broader regional markets also posted gains, with Shanghai up 0.36%, Australia’s S&P/ASX 200 rising 0.39%, Hong Kong’s Hang Seng adding 0.59%, and China’s CSI 300 increasing 0.34%. India’s Nifty 50 climbed 0.5%, while ICICI Prudential AMC surged as much as 20% on its trading debut following a $1.17 billion IPO. In the United States, stocks rebounded overnight as the S&P 500 snapped a four-day losing streak, closing up 0.79% at 6,774.76, the Nasdaq Composite jumped 1.38% to 23,006.36, and the Dow Jones added 0.14% to finish at 47,951.85, supported by softer inflation data and strong guidance from Micron Technology.