BOJ Rate Hike Brings Mixed Bag for Japanese Households

The Bank of Japan (BOJ) raised its policy rate to 1.25% in September 2026, marking the sixth rate increase since March 2024.

According to Mizuho Research and Technologies, this interest rate hike is expected to raise average 10-year time deposit rates by 0.15 points to 2.13%, while variable-rate mortgage rates are projected to rise by 0.25 points to 1.45%.

The impact of the rate hike varies across age groups, with younger households facing growing mortgage burdens and asset-rich seniors benefiting from increased interest income.

Households in their twenties or younger are expected to see annual interest payments rise by ¥22,000, while those aged 70 and older could see an increase of around ¥21,000 in their net interest income.