BOJ Prepares for Largest Rate Hike in Over Three Decades

The Bank of Japan (BOJ) is set to raise its policy rate from around 1.0% to approximately 1.25% at its September 17-18 monetary policy meeting, according to sources familiar with the matter.

This would be the first rate hike in three months and marks an acceleration from the previous pace of roughly once every six months since ending negative interest rates in March 2024.

A policy rate of 1.25% would be the highest level in approximately 31 years, with the BOJ aiming to address the risk that higher crude oil prices and yen weakness could push inflation above expectations.