# Bank of Japan raises rates to 31-year high

> The BOJ accelerates its tightening cycle to combat inflation risks, despite internal dissent and pressure from Washington.
- Title: Bank of Japan raises rates to 31-year high · CNBC | Shortify
- Summary: The BOJ accelerates its tightening cycle to combat inflation risks, despite internal dissent and pressure from Washington. The Bank of Japan is moving faster…
- Keywords: bank of japan, interest rates, monetary policy, inflation, yen, japanese economy, rate hike, central banking, kazuo ueda, sanae takaichi, business, finance
- Source: CNBC — https://cnbc.com/2026/09/18/japan-raises-rates-30-year-high-yen-jgb.html
- Author: Lim Hui Jie
- Published: 2026-09-18T03:16:15+00:00
- Read time: 1 min
- Topics: bank of japan, interest rates, monetary policy, inflation, yen, japanese economy, rate hike, central banking, kazuo ueda, sanae takaichi, business, finance
## BOJ raises rates to 31-year high
The Bank of Japan increased its policy rate by 25 basis points to 1.25%, the highest level since 1995, as it accelerates its tightening cycle.

> The Bank of Japan has raised its policy rate by 25 basis points to 1.25%, the highest level since 1995.
## Faster pace of rate increases
The BOJ raised rates just three months after its last hike, compared to six months previously, marking a quickening in its normalization cycle that began in March 2024.
## Split decision with two dissenters
The vote was 7-2, with board members Toichiro Asada and Ayano Sato, both reflationists appointed by Prime Minister Sanae Takaichi, voting against the hike.
## Inflation risk drives the decision
The BOJ cited risks that inflation will exceed its 2% target, aiming to stabilize price rises so they don't overshoot and damage the economy.

> The BOJ said the move was because of a risk that inflation will deviate upward to beyond its 2% target.
## Dissenters say inflation still low
Asada and Sato argued that core inflation at 1.7% remains below the 2% target and economic conditions haven't strengthened enough to justify tightening.
## U.S. pressure and currency concerns
The U.S. Treasury has pushed Japan to continue rate hikes, while the yen remains historically weak despite coordinated intervention from Tokyo and Washington.
## Key takeaway

The Bank of Japan is moving faster to raise rates than before, signaling serious concern about inflation overshooting its 2% target.