Bank of Japan raises policy rate to 1.25% on Sept 18, 2026
On 18 September 2026 the Bank of Japan raised its policy rate by 25 basis points to 1.25%, the highest level since 1995, marking another step in monetary policy normalisation and widening global yield differentials.
The desk brief
On 18 September 2026 the Bank of Japan raised its policy rate by 25 basis points to 1.25%, the highest level since 1995, marking another step in monetary policy normalisation and widening global yield differentials.
A higher BoJ policy rate increases the return on JPY assets and can prompt Japanese investors to reallocate away from high-beta dollar EM assets. Tighter cross-currency funding and larger US–Japan yield differentials can raise borrowing costs for African issuers accessing international private markets in USD, potentially increasing refinancing premia and reducing demand for new issuance.
Monitor BoJ commentary and next policy meeting for guidance on further hikes or steps toward normalization.
Sources & verification
Verified briefSupported by 3 independent publishers.
- Bank of Japan raises rates to 31-year high of 1.25% as inflation risesaljazeera.comSource published (opens in a new tab)
- Bank of Japan raises interest rates to 31-year high, flags concerns over inflationcnbc.comSource published (opens in a new tab)
- Japan's central bank raises benchmark interest rate to 1.25%euronews.comSource published (opens in a new tab)
Public references supporting this brief.