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Yen falls as BoJ raises borrowing costs to 1.25%, highest since 1995

9/18/2026

1.25%, the level to which the Bank of Japan lifted benchmark borrowing costs, is the highest the central bank has set since 1995.

Hawkish remarks from the BoJ governor failed to arrest the currency's renewed slide, producing a divergence between the rate action and the exchange-rate outcome that the governor's own guidance could not close.

A rate at a 31-year high, accompanied by hawkish commentary from the central bank's governor, represents the conventional dual signal for a tightening commitment: the actual move and the forward guidance reinforcing it.

That the yen weakened through both puts the adequacy of 1.25% directly in question.