Bank of Japan raises policy rate 25bp to 1.25%, highest since 1995
On 18 September 2026 the Bank of Japan raised its policy rate by 25 basis points to 1.25%, marking the highest level since 1995 and a further step in its ongoing tightening cycle that began in March 2024.
The desk brief
On 18 September 2026 the Bank of Japan raised its policy rate by 25 basis points to 1.25%, marking the highest level since 1995 and a further step in its ongoing tightening cycle that began in March 2024.
A faster BOJ tightening cycle raises global carry from higher JPY yields and can shift cross-currency funding flows, eroding demand for long-duration, carry-dependent USD eurobonds. This is conditional: only bonds financed by yield-chasing international investors or relying on low-cost cross-currency carry are likely to see relative pressure; high-credit, policy-backed curves should be more resilient.
Next BOJ policy/statement on Oct. 30, 2026 (Quarterly Statement on Monetary Policy).
Sources & verification
Developing storyFurther independent confirmation is required.
- Bank of Japan raises interest rates to 31-year high, flags concerns over inflationcnbc.comSource published (opens in a new tab)
- Monetary Policy Releases 2026 : 日本銀行 Bank of Japanor.jp (opens in a new tab)
Public references supporting this brief.