The major central banks of Japan, the US and Europe simultaneously raised interest rates by 0.25 percentage points, taking the FRB's policy rate to 3.75–4.00%, the Bank of Japan's to 1.25% and the ECB's deposit facility rate to 2.50%. This has triggered wider volatility across the foreign exchange, bond and equity markets.
In September 2026, the US FRB, Bank of Japan and ECB successively raised their policy rates by 0.25 percentage points, bringing tighter monetary policy to the three major regions. The FRB's policy rate is 3.75–4.00%, the Bank of Japan's is 1.25% and the ECB's deposit facility rate is 2.50%.
In the markets on 23 September, the dollar-yen exchange rate rose to ¥158.32 and the US 10-year Treasury yield climbed to 5.11%, while the Dow and Nasdaq fell. As of the morning of 24 September, the dollar-yen rate was still trading in the ¥158 range, with movements surrounding the US-Japan interest-rate differential continuing against the backdrop of expectations for a Bank of Japan rate hike and developments in US interest rates.
Gold prices were trending lower under the impact of rate hikes and a stronger dollar, while crude oil was rising due to developments in the Middle East. In the equity markets, major US indices weakened, with downward pressure particularly strong on technology stocks. Key factors to watch going forward include expectations for further FRB rate hikes, the future direction of the ECB and Bank of Japan, and movements in long-term US interest rates.
The euro was trading at around $1.138 per euro in these conditions. In the foreign exchange market, a widening interest-rate differential is supporting the dollar, while European energy prices and inflation trends are also influencing exchange rates.
Going forward, the stance of each central bank on additional rate hikes and developments in economic indicators will be important factors in determining the direction of the foreign exchange, equity and bond markets.