Financial News: Bank Of Japan Raises Rate To 1.25%; Highest

Bank Of Japan Raises Rate To 1.25%; Highest Since 1995

09/18/2026 - 05:04:00 (RTTNews)

(RTTNews) - The Bank of Japan raised its benchmark rate by a quarter point to a 31-year high amid high inflation and weaker yen.

The policy board, governed by Ueda Kazu, decided by a 7-2 majority vote to raise the interest rate to 1.25 percent, marking the highest since 1995. The move was widely anticipated by markets.

The bank had lifted its benchmark rate by 25 basis points in June and had signaled its plan to tighten policy at a gap of around six months.

Board members Asada Toichiro and Sato Ayano, both appointed by Prime Minister Sanae Takaichi, dissented from the increase.

The board said it will continue to raise the policy rate and adjust the degree of monetary accommodation, in response to developments in economic activity and prices as well as financial conditions.

ING economists said the dissent from Asada and Sato point to resistance against the fastest pace of rate increases in more than three decades and suggest they may increasingly act as a brake on further tightening.

Economic activity and prices are developing generally in line with the baseline scenario, the board observed.

Policymakers highlighted that there is a risk that underlying CPI inflation will deviate above price stability target given the situation in the Middle East, expansion in AI-related demand and developments in foreign exchange rates. Inflation is expected to accelerate to a level clearly above 2 percent from the second half of fiscal 2026, the bank said.

The economy has recovered moderately despite the impact of tension in the Middle East. Further, Japan's financial conditions have been accommodative, the bank noted.

The Bank of Japan's decision follows similar actions by the U.S. Federal Reserve and the European Central Bank, as rising oil prices from Middle East tensions pose risks to inflation globally.

Official data released earlier in the day showed that Japan's core inflation slowed to 1.7 percent in August from 1.8 percent in July, while headline inflation remained unchanged at 1.9 percent.

For comments and feedback: contact editorial@rttnews.com

Market News provided by RTTNews

RECENT INTERNATIONAL FINANCIAL NEWS

Italy Current Account Surplus Shrinks In July (33 min(s), 42 sec(s) ago)
(RTTNews) - Italy's current account surplus decreased in July from the previous year, the Bank ...Full Story»

Bank Of Japan Raises Rate To 1.25%; Highest Since 1995 (50 min(s), 42 sec(s) ago)
(RTTNews) - The Bank of Japan raised its benchmark rate by a quarter point to a 31-year high amid ...Full Story»

Poland Industrial Output Growth Eases; Producer Price Inflation Highest Since April 2023 (59 min(s), 42 sec(s) ago)
(RTTNews) - Poland's industrial production growth moderated for the second straight month in A ...Full Story»

Malaysia Inflation Rises In August; Trade Surplus Grows Sharply (02 hr(s), 51 min(s), 42 sec(s) ago)
(RTTNews) - Malaysia's consumer price inflation increased slightly in August, while the trade ...Full Story»

UK Retail Sales Recover Unexpectedly (03 hr(s), 17 min(s), 42 sec(s) ago)
(RTTNews) - UK retail sales rebounded unexpectedly in August largely driven by the recovery in non ...Full Story»

Bank Of Japan Raises Key Interest Rate By 25 Bps (04 hr(s), 50 min(s), 42 sec(s) ago)
(RTTNews) - The Bank of Japan lifted its benchmark rate by a quarter point to a 31-year high, as w ...Full Story»

New Zealand August Trade Deficit NZ$1.349 Billion (11 min(s), 18 sec(s) ago)
(RTTNews) - New Zealand posted a merchandise trade deficit of NZ$1.349 billion in August, Statisti ...Full Story»

Japan Rate Decision On Tap For Friday (04 min(s), 18 sec(s) ago)
(RTTNews) - The Bank of Japan will wrap up its monetary policy meeting on Friday and then announce ...Full Story»