BOJ raises interest rates to 31-year high in widely expected move
The move was widely expected, but two board members dissented as policymakers signaled more tightening to curb inflation and support the yen.
- On Friday, September 18, the Bank of Japan raised its policy rate 25 basis points to 1.25% in a 7-2 vote, marking the highest level in 31 years.
- Rising inflation risks and import-price pressures from the weak yen prompted the BOJ to guard against currency-driven price hikes while aligning monetary policy with global peers.
- Board members Toichiro Asada and Ayano Sato dissented to the decision, signaling internal debate, while the yen weakened to 156.91 per dollar as traders viewed the split vote as a sign of cautious future tightening.
- Treasury Secretary Scott Bessent had previously pressed BOJ Governor Kazuo Ueda to take "decisive market and monetary steps" at a G20 meeting earlier this month, reflecting U.S. pressure to support the yen.
- Analysts polled by Reuters forecast further rate increases to 1.5% by end-March 2027 and 1.75% by mid-2027, though Governor Ueda said the pace depends on stable wage growth and inflation developments.
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CHANGES in Japanese financial markets, such as rising bond yields and interventions to strengthen the yen, have significant consequences for the global economy and borrowing costs, particularly in the US.
Bank of Japan Hikes Rates in 7-2 Vote, But Yen Still Falls
TOKYO – The Bank of Japan raised its benchmark interest rate to a 31-year high on Friday. Policymakers pushed the key rate up to 1.25 percent in a divided seven-to-two vote. Despite this move meant to fight inflation, the Japanese yen actually tumbled against the US dollar. Financial markets are now closely watching Governor Kazuo […] <p>The post Bank of Japan Hikes Rates in 7-2 Vote, But Yen Still Falls first appeared on Chiang Rai Times.</p>
The cost of money returns to 1.25%. A choice that will influence countries that buy yen cheaply and then reinvest elsewhere. The article The world is chasing Tokyo's liquidity. The trend in rates is decided by Japan and comes from The Truth.
The Japanese Central Bank has raised the key rate to the highest level in more than 30 years. However, compared with other major economies, the rate remains low – and still carries enormous risks.
The Bank of Japan’s Damp Squib
So much for US Treasury Secretary Scott Bessent’s claim that he had asymmetric information about the Bank of Japan’s (BOJ) interest rate policy intentions. So much, too, for his warning to currency traders not to bet against the Japanese yen, claiming that he was now the house. Yesterday, at its interest rate meeting, far from surprising markets with a more aggressive monetary policy stance, the BOJ confirmed the market’s view that it is a cent…
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