BOJ Lifts Interest Rates to 31-Year High of 1.25%, Signals Policy Shift

14:08 - 18.09.2026


September 18, Fineko/abc.az. The Bank of Japan (BOJ) raised its key policy rate by 25 basis points to 1.25%, reaching its highest borrowing cost level since 1995 (a 31-year high). The decision was approved by a 7-2 majority vote.

BOJ Governor Kazuo Ueda stated that the central bank has entered a new monetary policy phase focused on preemptively tackling inflation risks to prevent price growth from overshooting the 2% target. Surging oil costs, ongoing supply chain pressures, and a weak yen have intensified wholesale and consumer price increases.

The central bank signaled that further rate hikes remain on the table if underlying inflation risks persist.