Bank of Japan raises rates to highest since 1995

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1. 31d ago

   Bank of Japan raises rates to 1.25%, highest since 1995

   The Bank of Japan raised its policy interest rate to 1.25% from 1.00%, the highest level since 1995, to prevent inflation from overshooting its target. Despite the monetary tightening, the Japanese yen continued to slide. Japan's service-sector inflation rose to a more than two-year high in August, strengthening expectations of further rate hikes. Asian markets diverged as Japanese and Chinese stocks fell on rising bond yields.

   Why it matters

   The Bank of Japan's decision to raise interest rates is aimed at controlling inflation. The move has implications for global market liquidity and the value of the Japanese yen. The yen's weakness has been a concern for policymakers, with Finance Minister Katayama warning that the principles behind the joint US-Japan intervention of July 31 remain in place.

   What is confirmed

   • Bank of Japan raised interest rates to 1.25%, the highest since 1995.
   • Japan's service-sector inflation rose to a more than two-year high in August.
   • The Japanese yen continued to slide, touching 159.00 and trading just under that mark.
   • Tokyo's core inflation rate jumped in September, bolstering the case for more BOJ hikes.

   Still unconfirmed

   • The shift from stimulus to inflation control may impact global market liquidity.

   What to watch next

   • Bank of Japan's future interest rate decisions
   • Tokyo's core inflation rate for October
   • US-Japan intervention in the currency market
   Sources used for this update (10)

   1. www.cnbctv18.com — Bank of Japan summary affirms priority is avoiding inflation overshoot
   2. www.whalesbook.com — Bank of Japan Hikes Rates to 1.25%, Targets Inflation Control
   3. note.com — Japan weakened over 30 years and became poor in 5
   4. note.com — Real Estate Reality: The 1.25% Policy Rate—Why You Should Check Your DSCR Before the Next Hike
   5. www.cnbctv18.com — Asian stocks mixed as Wall Street's late reversal offsets soft US inflation data
   6. www.thestar.com.my — Australia raises key rate to 15-year high
   7. www.cnbctv18.com — Japanese Yen weakens as BOJ summary damps bets for back-to ...
   8. finance.yahoo.com — All the Reasons Why the US Is So Concerned About Japan's Yen and Bond Market
   9. investinglive.com — See more opportunities: Elev8 broker's Forex market breakdown for October
   10. www.thestar.com.my — Tokyo core inflation rate jumps in September, bolsters case for more BOJ hikes | The Star
   confidence 90%
2. 35d ago

   Bank of Japan Rates Reach 1995 High as Service Inflation Rises

   The Bank of Japan raised its policy interest rate to 1.25% from 1.00%, marking the highest level since 1995. Despite the monetary tightening, the Japanese yen continued to slide, touching 159.00 and trading just under that mark on track for a fifth straight gain. Finance Minister Katayama warned that the principles behind the joint US-Japan intervention of July 31 remain alive. Meanwhile, Japan service-sector inflation rose to a more than two-year high in August, strengthening expectations that the central bank could continue raising interest rates. Asian markets diverged as Japanese and Chinese stocks fell on rising bond yields.

   Why it matters

   The rate hike to 1.25% comes as global bond markets experience turmoil and bond yields soar in 2026. The policy shift aims to address energy-driven inflation and a declining yen, though the currency weakened further immediately following the decision. The United States and Japan previously conducted a joint intervention on July 31.

   What is confirmed

   • The Bank of Japan raised its policy interest rate by 0.25 percentage points from 1.0% to 1.25%, reaching the highest level since 1995.
   • Finance Minister Katayama stated that the principles behind the joint US-Japan intervention of July 31 are still alive.
   • Japan's service-sector inflation rose to a more than two-year high in August.

   Still unconfirmed

   • The USD/JPY pair touched 159.00, its highest since early September, on track for a fifth straight gain.
   • Asian markets diverged as Japanese and Chinese stocks fell on rising bond yields.

   What to watch next

   • Further currency interventions or official statements from Finance Minister Katayama regarding the sliding yen.
   • Upcoming economic data releases providing clues on future central bank policy paths.
   Sources used for this update (9)

   1. note.com — Easing Despite Rate Hikes: Resolving the Contradiction Between the Bank of Japan and the U.S.
   2. note.com — How will FANG+ and NASDAQ100 move? The secrets of long-term holding to turn interest rate hikes in Japan and the US and a stronger yen into opportunities
   3. www.fool.com — Global Bond Markets Are in Turmoil. Here's Why Investors Shouldn't Panic.
   4. www.latestly.com — Business News | Japan Service Inflation Hits over Two-year High, Bolsters Case for Further BOJ Rate Hikes
   5. en.infomaxai.com — [Asian Stock Markets Summary]Japan, China Fall Amid Rising Rates - Taiwan Closed
   6. cobak.co — Bank of Japan raises base interest rate to 1.25%... highest in 31 years
   7. www.mitrade.com — Japanese Yen keeps sliding as Tokyo repeats its warning and holds fire
   8. investinglive.com — BOJ July minutes preview: a hold overtaken by September's rate hike
   9. www.thestar.com.my — Dollar steadies near two-month high as US-Iran stalemate lifts oil, Fed rate hike bets build
   confidence 95%
3. 40d ago

   Bank of Japan Implements Rate Hike to Highest Level Since 1995

   The Bank of Japan raised its policy interest rate from 1.00% to 1.25% to combat a declining yen and energy-driven inflation, marking the highest level in approximately 31 years. The uncollateralized overnight call rate adjustment officially takes effect today. The measure passed with a 7-2 vote last week. Despite the policy tightening, the yen previously fell more than 2% to 157.45. Meanwhile, global monetary policy diverges as European Central Bank policymaker Gabriel Makhlouf stated that the ECB will need to raise rates again if second-round inflation effects appear, though none are visible yet.

   Why it matters

   The Bank of Japan rate increase occurs alongside a resuming Federal Reserve rate cycle, leaving a 275 basis point gap between the two central banks. In Europe, policymakers monitor whether elevated energy costs will spread through the broader economy. Central banks globally continue to weigh tightening measures against exchange rate pressures and persistent inflation targets.

   What is confirmed

   • The Bank of Japan raised its policy interest rate to 1.25% on September 18 in a 7-2 vote.
   • The rate change for the uncollateralized overnight call rate takes effect on September 24.
   • ECB policymaker Gabriel Makhlouf stated on Wednesday that the European Central Bank will have to raise interest rates again if high energy prices feed through to other areas.

   Still unconfirmed

   • The European Central Bank is currently seeing no sign of second-round inflation effects feeding through to wider prices.

   What to watch next

   • Official currency market response to the implementation of the Bank of Japan rate hike.
   • Further data releases from the European Central Bank regarding second-round inflation effects.
   Sources used for this update (2)

   1. www.quiverquant.com — Quiver News
   2. english.aawsat.com — ECB Says Will Have to Act Again if 2nd-round Inflation Effects Appear
   confidence 90%
4. 41d ago

   Bank of Japan Rate Hike to 1.25% Takes Effect September 24

   The Bank of Japan raised its policy interest rate from 1.00% to 1.25% on September 18, the highest level in approximately 31 years. The measure passed with a 7-2 vote to combat a declining yen and energy-driven inflation. Despite the tightening, the yen fell more than 2% to 157.45. The rate change for the uncollateralized overnight call rate officially takes effect on September 24. This move occurs as the Federal Reserve resumes rate increases, maintaining a 275bp gap between the two central banks.

   Why it matters

   Japan is attempting to stabilize its currency and curb inflation after decades of ultra-low rates. The persistent gap between Japanese and US interest rates encourages carry trades, which puts downward pressure on the yen.

   What is confirmed

   • The Bank of Japan raised its policy interest rate from around 1.00% to around 1.25% on September 18.
   • The current rate of 1.25% is the highest since 1995.
   • The policy board passed the rate hike with a 7-2 vote.
   • The new rate takes effect on September 24.

   Still unconfirmed

   • The yen traded at 157.45 after the rate hike.
   • The yen fell more than 2% following the announcement.

   What to watch next

   • Market reaction upon the official rate implementation on September 24
   • Future Federal Reserve rate decisions affecting the 275bp gap
   Sources used for this update (3)

   1. note.com — Bank of Japan to 31-Year High Interest Rates—How Will Your Loans, Savings, and Salary Change?
   2. note.com — BOJ Raises Rates to 1.25%: What Happens to Deposit Interest Rates?
   3. www.tradingnews.com — USDJPY (157.45) Coils Below 157.536 Fibonacci as 275bp Fed-BOJ Gap Keeps Carry Alive — 159.45 in View
   confidence 95%
5. 42d ago

   Bank of Japan raises interest rates to 1.25%

   The Bank of Japan increased its policy interest rate from 1.00% to 1.25% on September 18, the highest level since 1995. Governor Ueda Kazu and the policy board passed the measure with a 7-2 vote to fight energy-driven inflation and a declining yen. Despite the hike, the yen depreciated to 158.05 yen. This tightening coincides with the Federal Reserve resuming rate increases for the first time since 2023 due to a worsening inflation outlook.

   Why it matters

   Monetary policy shifts in Japan usually strengthen the currency. The current disconnect suggests market pressures outweigh the rate hike. Global central banks including the ECB are also tightening policy.

   What is confirmed

   • The Bank of Japan raised its policy interest rate to 1.25% on September 18.
   • This is the highest interest rate level since 1995.
   • The Bank of Japan policy board approved the rate increase by a 7-2 majority vote.
   • The Federal Reserve resumed raising interest rates for the first time since 2023.

   Still unconfirmed

   • The yen reached as low as 158.05 yen following the rate hike.
   • The Federal Reserve set its benchmark rate between 3.75% and 4%.

   What to watch next

   • Further Federal Reserve rate adjustments
   • Japanese yen exchange rate stability
   • Bank of Japan policy board meetings
   Sources used for this update (2)

   1. www.theasianbanker.com — Fed raises rates for first time since 2023 as inflation outlook worsens
   2. note.com — The Bank of Japan raises rates for the first time in 31 years. Yet, the yen was sold | September 21, 2026 - Outlook for the week ahead
   confidence 90%
6. 44d ago

   Bank of Japan Raises Policy Rate to 1.25%

   The Bank of Japan lifted its benchmark interest rate to 1.25%, marking the highest level since 1995. Governor Ueda Kazu and the policy board approved the increase by a 7-2 majority vote in September 2026. The decision aims to combat persistent inflation driven by energy costs and address a weak yen. Meanwhile, the Federal Reserve set its benchmark rate between 3.75% and 4%, and the European Central Bank also tightened monetary policy. Despite the tightening moves, the Japanese yen weakened further as Silver Week holiday thinning reduced trading liquidity in the foreign exchange markets.

   Why it matters

   Global central banks including the Bank of Japan, the Federal Reserve, and the European Central Bank are confronting inflation pushed higher by an energy shock. The Keizai Doyukai evaluated the Bank of Japan rate hike as an appropriate response toward economic normalization. Borrowers with variable-rate loans in Japan face potential adjustments, making contract review dates critical.

   What is confirmed

   • The Bank of Japan raised its policy rate to approximately 1.25% in September 2026.
   • The Federal Reserve raised its benchmark interest rate to 3.75%-4%.

   Still unconfirmed

   • Banks including RHB and UOB expect the US Federal Reserve to hike rates again at the December meeting.

   What to watch next

   • Interest rate adjustment dates for variable-rate loans in Japan
   • Trading liquidity trends following the Silver Week holiday
   • Future timing of subsequent Bank of Japan and Federal Reserve rate decisions
   Sources used for this update (8)

   1. www.straitstimes.com — UOB shares rise after Fed hikes rates; yen weakens against Singdollar: Markets this week
   2. note.com — [News] Keizai Doyukai Evaluates Bank of Japan's Interest Rate Hike Policy
   3. note.com — The Bank of Japan has raised interest rates to 1.25%. If you have a variable-rate loan, the one line you should check this week is the 'adjustment date'.
   4. cryptobriefing.com — Yen faces vulnerability as Japan’s holiday thins trading liquidity
   5. thecurrencyanalytics.com — Dtcpay Secures $25 Million Series A with Backing from Japan’s SBI Group
   6. en.infomaxai.com — BOJ's Next Rate Hike - When Will It Come?
   7. www.tekedia.com — BOJ, Federal Reserve and ECB Navigate Inflation Risks From Higher Energy Prices
   8. finance.biggo.com — AI Investment Expands Despite Rate Hikes—Repayment Capacity 'Sorting' Begins in Earnest
   confidence 100%
7. 45d ago

   Bank of Japan Raises Rates to 1.25%, Highest Since 1995

   The Bank of Japan lifted its benchmark interest rate by a quarter point to 1.25%, marking a new 31-year high. Governor Ueda Kazu and the policy board approved the increase by a 7-2 majority vote. The central bank acted to curb rising prices, address persistent inflation driven by energy costs, and counter a weak yen. Despite the rate hike, the Nikkei Stock Average climbed on Friday, reflecting unusual market behavior following tightening moves by both the Bank of Japan and the US Federal Reserve.

   Why it matters

   This policy shift follows recent tightening monetary policy by major global institutions including the US Federal Reserve and the European Central Bank. The decision alters investment dynamics by making the United States less alluring for Tokyo investors. Analysts and market participants continue to monitor the central bank for signals regarding future rate increases.

   What is confirmed

   • The Bank of Japan raised its benchmark interest rate by 25 basis points to 1.25%, the highest level since April 1995.
   • The policy board decided the rate hike by a 7-2 majority vote.
   • Two out of nine board members dissented from the decision.
   • The increase aims to curb rising prices, persistent inflation from energy costs, and a weaker yen.
   • The Nikkei Stock Average rose following the announcement.

   What to watch next

   • Future rate hike signals from Bank of Japan Governor Ueda
   • Subsequent market reactions in Japanese equities and the yen
   Sources used for this update (16)

   1. BBC — Japan raises interest rate to new 31-year high to curb rising prices
   2. ft.com — Bank of Japan raises rates to highest since 1995
   3. CNBC — CNBC Daily Open: Hike, hold, hike
   4. Reuters — Yen slumps after BOJ hikes rates as expected
   5. WSJ — Bank of Japan Raises Rates, Making U.S. Less Alluring for Tokyo Investors
   6. CNBC — Why Japan’s markets flipped the usual script after central bank rate hike
   7. The Guardian — Japan raises interest rates to 31-year high to curb impact of rising prices
   8. Reuters — BOJ Governor Ueda's comments at news conference
   9. www.theguardian.com — Japan raises interest rates to 31-year high to curb impact of rising prices
   10. cryptobriefing.com — Bank of Japan raises benchmark interest rate to 1.25%, highest level since 1995
   11. www.rttnews.com — Bank Of Japan Raises Rate To 1.25%; Highest Since 1995
   12. note.com — US and Japan raise rates in the same week. Yet stocks rose | Why the 'rate hike = stock decline' logic didn't hold from September 14–18, 2026
   confidence 100%