Bank of Japan Raises Benchmark Interest Rate to 31-Year High

Japan's central bank has raised its benchmark interest rate to 1.25% from 1.0%, marking the highest level in 31 years, according to an announcement on September 18, 2026.

The Bank of Japan has been trying to normalize monetary policy after decades of keeping interest rates near or below zero to encourage borrowing and spending and counter deflation.

By raising the benchmark rate, the central bank is attempting to stimulate economic growth and pull Japan out of its economic doldrums.