BOJ Raises Policy Interest Rate to 1.25% Amid Rising Inflation Expectations

The Bank of Japan raised its policy interest rate to 1.25% in September, marking a new high since June.

The decision was made by a 7-2 majority vote at the Monetary Policy Meeting on September 17 and 18, with the new guideline effective from September 24, 2026.

The Bank also set the interest rate applied to the complementary deposit facility at 1.25%, and the basic loan rate under the complementary lending facility at 1.5%.

According to the meeting's summary, Japan's economic activity and prices have been developing generally in line with the baseline scenario presented in the July 2026 Outlook for Economic Activity and Prices.