Japan's benchmark Nikkei stock index, the 225-issue Nikkei Stock Average, rose for the third consecutive trading day by ending up 575.87 points, or 1.49 percent, from Tuesday to close the day at 39,101.82.
The broader Topix index, meanwhile, finished 39.81 points, or 1.45 percent, higher at 2,794.26.
At the end of a two-day policy meeting on Wednesday, the BOJ decided to raise the short-term interest rate to around 0.25 percent from the previous range of zero to 0.1 percent.
After the central bank ended its negative rate policy in March, the rate reached its highest level since the 2008 global financial crisis.
The BOJ also announced plans to reduce its monthly government bond buying to about 3 trillion yen (about 20 billion U.S. dollars) during the January-March period in 2026, in a further shift toward policy normalization on the backdrop of a weakening yen.
Market watchers here noted that investors who had anticipated the rate hike and shorted stock index futures before the meeting increased their buying, while banking stocks like Mitsubishi UFJ, which are expected to benefit from rising interest rates, also saw significant gains.
Local analysts pointed out that the rate hike aimed to correct the yen's depreciation against the U.S. dollar in the forex market, where the yen jumped to the 151 level against the U.S. dollar shortly after the announcement but fell back to the 153 range in volatile trading on Wednesday.
On the top-tier Prime Market, gainers were led by bank, securities and marine transportation issues.
Issues that increased outnumbered those that declined by 1,450 to 177, while 18 ended the day unchanged.
Latest comments