Bank of Japan raises interest rate to 1.25 percent in split decision
The Bank of Japan raised its key interest rate to 1.25 percent in a split decision, reaching its highest level since 1995 to curb inflation and support the yen.
The Bank of Japan has increased its benchmark interest rate to 1.25 percent, marking the highest borrowing level in the country since 1995. The central bank made the decision in a divided vote among policy board members as it responds to rising inflation risks and pressures to stabilize the Japanese yen.
Following the announcement, stock indexes across Asia showed gains, with South Korea's Kospi rising 2.2 percent and China's primary benchmarks advancing. Conversely, Japan's broader Topix index declined 0.4 percent during the session. The policy shift reflects growing momentum toward monetary normalization despite internal debate over the timing and pace of future rate hikes.
Sources: Sweden Herald, Bloomberg
How outlets assessed this
- Sep 18, 2026, 08:00 AM UTC
- Sweden Herald Neutral Focused on the broader market reaction and equity gains across Asian stock exchanges following the announcement.
- Bloomberg Cautious Emphasized the divided vote among policymakers and internal board dissent behind the central bank's rate hike.