Neutral impactEconomy HIGH IMPACT

BOJ raises interest rates to 31-year high in widely expected move

Economic Times 1 hr ago·18 Sept 2026, 3:04 am

The Bank of Japan has ended its long-standing policy of keeping borrowing costs near zero. The central bank has raised its benchmark interest rate to 1.25 percent, a level last seen in 2008. This marks a major shift in the country's monetary policy and ends an era of ultra-loose financial conditions.

For investors, this change is significant because it signals that Japan is finally joining the global trend of tightening monetary policy to fight inflation. The move could impact global markets, including Indian equities, as it may lead to capital outflows from emerging markets. Investors should monitor the central bank's future guidance closely to gauge the pace of further rate hikes.

Excerpt from Economic Times

In a significant policy shift, the Bank of Japan has raised interest rates to a 31-year high of 1.25 percent, a widely anticipated decision aimed at curbing inflation. The board's vote was split seven to two, with Toichiro Asada and Ayano Sato expressing dissent. Governor Kazuo Ueda is scheduled to discuss the…
Read the original at Economic Times

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