At its September monetary policy meeting, the BOJ changed its policy rate from 1.00% to 1.25%, taking it to its highest level in approximately 31 years. Whether to implement another rate hike will be the focus of upcoming meetings.
At its meeting on 18 September 2026, the BOJ changed its policy rate from 1.00% to 1.25%. This was the highest level in approximately 31 years and marked further progress toward normalizing monetary policy to contain inflation risks.
As of 16 October, concerns about inflation driven by higher oil prices and yen depreciation were intensifying. The September corporate goods price index rose 6.8% year on year, while the yen-denominated import price index rose 24.5%. BOJ board member Koeda Junko (小枝 淳子) expressed the view that the Bank should not be excessively cautious about raising rates.
Attention will focus on whether another rate hike will be implemented at the 29–30 October meeting, after assessing price and wage trends and market expectations for interest rates. Some have also pointed out that the BOJ may already be near the lower end of the neutral rate range.
Markets are watching developments in the U.S.-Japan interest-rate differential and the yen exchange rate. The dollar-yen exchange rate was around ¥158 on 16 October. The pace of future rate hikes is expected to vary depending on price and economic conditions.