Central Bank Decisions
Bank of Japan Rate Hike Fails to Stem Yen Depreciation
18 Sep 2026
The Bank of Japan raised its benchmark interest rate by 25 basis points to 1.25%, a 31-year high, but the Japanese Yen weakened past 157 against the US Dollar as the decision lacked hawkish forward guidance.
Why it matters
The market reaction highlights a disconnect between the central bank's policy action and investor expectations for future tightening, undermining the Yen's ability to recover despite the rate increase.