Bank of Japan Lifts Policy Rate to 1.25%, a 31-Year High, on 7-2 Vote

The Bank of Japan raised its policy rate by 25 basis points to 1.25%, the highest in 31 years, effective September 24. The board split 7-2, and the yen weakened as investors focused on the dissent. The BOJ expects core CPI to move clearly above 2% from the second half of fiscal 2026.