Bank of Japan Raises Rate to 31-Year High

The Bank of Japan on September 18, 2026 raised its benchmark rate from 1.00% to 1.25%, the highest level since 1995. After a two-day Monetary Policy Meeting, the Policy Board voted 7-2 for the 0.25 percentage point increase. Governor Kazuo Ueda and members Himino Ryozo, Uchida Shinichi, Takata Hajime, Tamura Naoki, Koeda Junko, and Masu Kazuyuki formed the majority. New guidelines take effect September 24, 2026: the complementary deposit facility rate rises to 1.25% and the basic loan rate to 1.5%. The BOJ ended decade-long stimulus in 2024 at -0.1% and has raised rates six times in two and a half years, roughly twice a year, including a June 25 basis-point hike. Core inflation was 1.7% in August, down from 1.8%, near the 2% target. Tokyo and Washington jointly intervened in August after the yen hit a 40-year low. Contested: Asada Toichiro and Sato Ayano dissented from the majority. They argued that economic momentum and price increases did not yet warrant a hike. No outlet disputes the rate, date, or 7-2 tally.