Bank of Japan raises rates to 31-year high of 1.25% as inflation rises

Bank of Japan raises benchmark interest rate from 1 to 1.25 percent, pledging to help counter inflation risks.

x whatsapp-stroke copylink google Add Al Jazeera on Google info A man walks in front of an electronic quotation board displaying the Nikkei 225 stock prices on the Tokyo Stock Exchange in Tokyo [File: Kazuhiro Nogi/AFP] Published On 18 Sep 2026 18 Sep 2026 The Bank of Japan (BoJ) has raised interest rates by 0.25 to 1.25 percent, pushing borrowing costs to their highest level in 31 years, amid rising inflation and wages, and pressure from Washington.

The move on Friday marked the first hike since June, and takes interest rates closer to levels the BoJ deems neutral to the economy, marking another step away from decades of ultra-low rates that cemented the yen’s status as a cheap global funding currency.