Bank of Japan raises rates to highest since 1995

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1. 1h 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
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