BOJ Interest Rate Hike Tipped to Hit Aussie Holidaymakers

Australia's holidaymakers who are planning to visit Japan may face higher costs as the country's central bank is tipped to increase interest rates by 0.25 per cent to 1.25 per cent, its highest rate in 31 years.

The Bank of Japan (BOJ) aims to combat rising inflation, which has reached 7.6 per cent in August, and is expected to send consumer inflation rates above 2 per cent.

Australia's travel to Japan has skyrocketed since the pandemic, with almost one million Australians visiting the country last financial year, making it the third most travelled tourist destination among Australians.

The favourable exchange rate between the Japanese Yen and Australian Dollar has made holidays more affordable for Australians, but a rate hike could topple the exchange rate again and leave tourists with planned trips in the lurch.