BOJ rate hike signals faster pace of tightening amid inflation risks, weak yen: Economists - CNA

The central bank raised rates on Friday (Sep 18) to a ‌31-year high of 1.25 per cent, pressing ahead with policy normalisation as inflation risks remain elevated.

A woman walks in front of the Bank of Japan headquarters in Tokyo, Japan, September 16, 2026. REUTERS/Manami Yamada

This audio is generated by an AI tool.

Calvin Yang 18 Sep 2026 02:16PM Bookmark Bookmark Share WhatsApp Telegram Facebook Twitter Email LinkedIn Set CNA as your preferred source on Google Add CNA as a trusted source to help Google better understand and surface our content in search results. Read a summary of this article on FAST. Get bite-sized news via a newcards interface. Give it a try. Click here to return to FAST Tap here to return to FAST FAST The Bank of Japan’s latest interest rate hike remains part of a gradual normalisation of monetary policy, but economists say inflation risks and a weak yen could push policymakers to tighten more quickly in the months ahead.

The central bank raised rates on Friday (Sep 18) by 25 basis points to a 31-year high of 1.25 per cent.

The widely expected move, coming three months after its previous hike, takes borrowing costs closer to levels the BOJ considers neutral for the economy and marks another step away from decades of ultra-low interest rates.