The Bank of Japan (BOJ) raised its benchmark interest rate from 1.00% to 1.25% on Friday, September 18, marking the highest Japanese interest rate in 31 years. The decision was made after a two-day monetary policy meeting and passed by a 7–2 vote.
The rate increase is part of the BOJ’s continued shift away from the ultra-low interest-rate policies that Japan maintained for decades. The central bank is responding to persistent inflation pressures, higher energy costs and changes in wages and prices.
The BOJ indicated that it remains prepared to adjust interest rates further depending on economic conditions, inflation and financial developments. However, two board members voted against the latest increase, reflecting differences within the policy board over the pace of monetary tightening.
Following the announcement, Japan’s Nikkei 225 rose about 1.9% in early Friday trading, while the Japanese yen weakened against the U.S. dollar.
News as Reported.
