- September 18, 2026
- Posted by: Tresmark
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The Bank of Japan raised its benchmark interest rate from 1% to 1.25% on Friday, taking borrowing costs to their highest level in 31 years as policymakers respond to persistent inflation pressures and rising oil prices.
The decision was approved by a 7-2 majority, with board members Asada and Sato opposing the increase and calling for greater patience before further tightening.
The BOJ said price pressures are becoming more widespread and warned that inflation could exceed expectations, leaving the door open to additional rate increases.
However, the move did not strengthen the Japanese yen. Instead, the currency weakened as investors focused on the two dovish dissenting votes and the absence of stronger signals from the central bank about future rate hikes.
Governor Kazuo Ueda is scheduled to address the media later on Friday, with investors expected to closely examine his comments for clues about the BOJ's next steps.
