Business
Bank of Japan raises interest rate to 31-year high of 1.25 percent
September 18, 2026 at 04:54 AM · Updated 28d ago
Coverage
5 reports · 2 in Arabic, 3 in English · over 4 hours
The Bank of Japan has raised its benchmark interest rate to 1.25 percent, the highest level in 31 years, in response to persistent inflation.
- The Bank of Japan raised its benchmark rate from 1 percent to 1.25 percent on Friday, a level not seen since 1995.
- The yen fell 0.6 percent to 156.91 against the dollar despite the hike, resuming its decline after a brief rise on Thursday.
- Board members voted 7-2 for the increase, the sixth under Governor Kazuo Ueda; two members voted to keep policy unchanged.
- Core inflation eased to 1.7 percent in August from 1.8 percent the previous month, remaining near the bank's 2 percent target.
- Analysts doubted further near-term rate hikes, with Fred Neumann of HSBC and Prashant Newnaha of TD Securities expressing caution.
- The yen's weakening after the decision helped the Nikkei index gain nearly 2 percent.


