Story perspectives

BOJ Lifts Rates to 1.25% as Inflation Nears 2%

By Drooid · Sep 16, 2026, 2:12 PM UTC · How we work

Summary

Story summary

BOJ Governor Kazuo Ueda raised the policy rate to 1.25% on Sept 18, 2026, the first hike in three months.
Ueda said underlying inflation is “quite close” to the 2% target, prompting the increase.
July headline inflation hit 1.9% YoY and core inflation rose to 1.8% for a second month.
Real wages grew 2.4% in July, marking the seventh consecutive month of wage growth.

History

Historical Context

After the BOJ introduced zero-interest policy in 1999 and expanded quantitative easing through the early 2000s, it ended that stance in June 2006 by raising the policy rate to 0.25% under Governor Toshihiro Nikai. The 2006 tightening marked the first move away from stimulus, paving the way for later adjustments by successors such as Governor Kazuo Ueda.

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Story summary

BOJ Governor Kazuo Ueda raised the policy rate to 1.25% on Sept 18, 2026, the first hike in three months.
Ueda said underlying inflation is “quite close” to the 2% target, prompting the increase.
July headline inflation hit 1.9% YoY and core inflation rose to 1.8% for a second month.
Real wages grew 2.4% in July, marking the seventh consecutive month of wage growth.

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