Bank of Japan Lifts Key Rate to 1.25%, Highest Since 1995, to Fight Rising Prices

Exam-focused facts from the 20 September 2026 current affairs briefing.

Key facts

The Bank of Japan (BOJ) raised its main interest rate from 1% to 1.25% on Friday, a level not seen since 1995.
The BOJ has hiked rates six times in the last two and a half years, beginning from minus 0.1% in 2024.
Japan's core inflation eased to 1.7% in August from 1.8% in July, remaining close to the BOJ's 2% target.
The US Federal Reserve raised its benchmark interest rate for the first time in over three years, while the European Central Bank also increased borrowing costs earlier this month.
In August, Japan and the United States jointly intervened to halt a slide in the yen after it fell to a fresh 40-year low, the first coordinated intervention since 2011.