The Bank of Japan decided to raise its policy rate to around 1.25%. After the announcement, the yen temporarily weakened to the 157-yen level against the US dollar, while Governor Ueda Kazuo (植田 和男) indicated that the degree of monetary easing would continue to be adjusted.
At its monetary policy meeting on the 18th, the Bank of Japan decided to raise its policy rate from around 1% to around 1.25%. This was the first rate hike since June 2026, and represented a faster pace than before, although 2 of the 9 Policy Board members opposed the increase.
After the decision was announced, the yen temporarily weakened to the 157-yen level against the US dollar in the foreign exchange market. In response, Governor Ueda Kazuo (植田 和男) said that the policy phase had changed, and indicated that the Bank would continue to raise the policy rate and adjust the degree of monetary easing in line with economic and price conditions and financial conditions.
The announcement indicated to the market a direction that brings monetary policy one step closer to normalization. Adjustments to interest-rate levels and the degree of easing are expected to continue based on developments in economic indicators and price trends.