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Japan raises interest rates to 1.25% amid yen volatility

Updated 43 times since CLSTR started tracking revisions of this situation.

What changed

2026-09-19 02:03 UTC → 2026-09-19 20:37 UTC · added removed

Japan’s economic landscape is characterized by a tension between rising business demand and fluctuating domestic consumption. Revised data from the Cabinet Office shows the economy grew at an annualized rate of 1.4% in the second quarter of 2026, up from a preliminary 1.1%. This growth was supported by business capital expenditure, which saw a less severe decline than initially reported. Additionally, July wage data showed significant strength, with nominal cash earnings rising 4.7% year-on-year—the fastest pace since 1997—and real wages increasing by 2.4%. In August, annual inflation slowed to 1.7%, down from 1.8% in July. This marked the eighth consecutive month that the consumer price index remained below the Bank of Japan’s (BOJ) 2% target. The slowdown was driven in part by energy prices returning to negative territory, with electricity prices falling by 2.4%, and government subsidies for gasoline and diesel. While the core CPI decelerated, underlying inflation—excluding fresh food and energy—remained steady at 1.9%. Following these indicators, the BOJ raised its benchmark interest rate by 25 basis points to 1.25% in a 7-2 vote, the highest level since 1995. Governor Kazuo Ueda stated that the central bank’s policy phase has changed, citing the need to stabilize inflation at 2% amid risks from rising energy costs linked to Middle East tensions. Despite the hike, the yen weakened against the dollar to approximately 157.54, pressured by the Federal Reserve’s aggressive tightening and two dissenting votes within the BOJ board. Analysts warn Domestically, the yen remains vulnerable, potentially exacerbating domestic inflation. rate hike is beginning to impact the housing market, with variable-rate mortgage loans at Mitsubishi UFJ Bank reaching 1.195% in September.

Versions

  1. 2026-09-19 20:37 UTC Japan raises interest rates to 1.25% amid yen volatility
  2. 2026-09-19 02:03 UTC Japan raises interest rates to 1.25% amid yen volatility
  3. 2026-09-18 04:53 UTC Japan economy faces yen volatility and reserve depletion
  4. 2026-09-18 02:51 UTC Japan economy faces yen volatility and reserve depletion
  5. 2026-09-18 02:51 UTC Japan economy faces yen volatility and reserve depletion
  6. 2026-09-16 08:30 UTC Japan economy faces yen volatility and reserve depletion
  7. 2026-09-13 07:16 UTC Japan economy faces yen volatility and reserve depletion
  8. 2026-09-12 22:09 UTC Japan economy faces yen volatility and reserve depletion
  9. 2026-09-11 17:21 UTC Japan economy faces yen volatility and reserve depletion
  10. 2026-09-08 11:08 UTC Japan economy faces yen volatility and reserve depletion
  11. 2026-09-08 09:29 UTC Japan economy faces yen volatility and reserve depletion
  12. 2026-09-08 05:52 UTC Japan economy faces yen volatility and reserve depletion
  13. 2026-09-08 03:48 UTC Japan economy faces yen volatility and reserve depletion
  14. 2026-09-08 03:02 UTC Japan economy faces yen volatility and reserve depletion
  15. 2026-09-07 05:03 UTC Japan economy faces yen volatility and reserve depletion
  16. 2026-09-06 14:57 UTC Japan economy shows mixed signals as spending and growth lag
  17. 2026-09-04 09:31 UTC Japan economy shows mixed signals as spending and growth lag
  18. 2026-09-04 05:24 UTC Japan economy shows mixed signals as spending and growth lag
  19. 2026-09-01 06:54 UTC Japan economy shows mixed signals as spending and growth lag
  20. 2026-09-01 04:07 UTC Japan economy shows mixed signals as spending and growth lag
  21. 2026-08-31 04:06 UTC Japan economy shows mixed signals as spending and growth lag
  22. 2026-08-29 08:43 UTC Japan economy shows mixed signals as spending and growth lag
  23. 2026-08-28 10:20 UTC Japan economy shows mixed signals as spending and growth lag
  24. 2026-08-28 02:16 UTC Japan economy shows mixed signals as spending and growth lag
  25. 2026-08-26 07:24 UTC Japan economy shows mixed signals as spending and growth lag
  26. 2026-08-22 09:08 UTC Japan economy shows mixed signals as spending and growth lag
  27. 2026-08-21 16:25 UTC Japan economy shows mixed signals as spending and growth lag
  28. 2026-08-21 06:35 UTC Japan economy shows mixed signals as spending and growth lag
  29. 2026-08-21 04:20 UTC Japan economy shows mixed signals as spending and growth lag
  30. 2026-08-20 22:28 UTC Japan economy shows mixed signals as spending and growth lag
  31. 2026-08-20 17:10 UTC Japan economy shows mixed signals as spending and growth lag
  32. 2026-08-20 01:21 UTC Japan economy shows mixed signals as spending and growth lag
  33. 2026-08-19 04:44 UTC Japan economy shows mixed signals as spending and growth lag
  34. 2026-08-18 09:34 UTC Japan economy shows mixed signals as spending and growth lag
  35. 2026-08-17 15:59 UTC Japan economy shows mixed signals as spending and growth lag
  36. 2026-08-17 07:57 UTC Japan economy shows mixed signals as spending and growth lag
  37. 2026-08-17 07:21 UTC Japan economy shows mixed signals as spending and growth lag
  38. 2026-08-17 05:31 UTC Japan economy shows mixed signals as spending and growth lag
  39. 2026-08-14 19:10 UTC Japan inflation, yen low, wages rise, BOJ rate hike outlook
  40. 2026-08-07 14:48 UTC Japan inflation, yen low, wages rise, spending down, BOJ
  41. 2026-08-07 01:14 UTC Japan inflation, yen low, wages rise, spending down, BOJ
  42. 2026-08-05 09:18 UTC Japan inflation, yen low, wages rise, BOJ hike outlook
  43. 2026-08-05 00:23 UTC Japan inflation rises, yen hits 40‑yr low, wages climb
  44. 2026-07-31 05:35 UTC Japan inflation up, yen at 40‑yr low, growth cut

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