BOJ Raises Rates to 31-Year High Amid Market Expectations

The Bank of Japan (BOJ) raised its policy rate by 25 basis points to 1.25% on September 18, 2026, marking its highest level since 1995.

This move was expected, with 89% of economists surveyed by CNBC correctly calling the size of the hike and a third naming both dissenting board members in advance.

The BOJ's decision came after pressure from Washington, with US Treasury Secretary Scott Bessent publicly urging Tokyo to act and declaring himself 'the house' on the yen's direction.

The hike did not trigger a yen carry trade unwind, as it had in August 2024, due to market preparation for the move.