Bank of Japan Raises Key Rate to 1.25%, Highest Since 1995

The Bank of Japan has raised its key policy rate to 1.25%, marking the highest level in 31 years, since 1995. This decision was made at the September monetary policy meeting on the 18th and follows a similar hike in June. The move accelerates the pace of interest rate increases, which had been about one increase every six months since March 2024.

Seven out of nine members of the policy board voted in favor of the increase, while two board members, Asada Doichiro and Sato Ayano, opposed it. This marks a significant shift in monetary policy as the Bank of Japan seeks to combat inflation and maintain economic stability.