Bank of Japan reportedly raises policy rate to 1.25%, a 31-year high

A market commentary says the Bank of Japan raised its policy rate by 25 basis points—0.25 percentage points—to 1.25% on September 18, 2026, its highest level in 31 years. It describes the move as another step away from ultra-low interest rates, aimed at preventing inflation from staying above the bank’s 2% target. The commentary says Governor Ueda indicated that future increases would depend on underlying inflation, wages and economic conditions.