BoJ Hikes to a 31-Year High of 1.25%, Then Two Dissents Knock the Yen to a Two-Week Low

The Bank of Japan raised rates to a 31-year high, then the yen slumped anyway.

The board lifted its benchmark 25 basis points to 1.25% on 18 September 2026, a 7-2 vote and the highest since April 1995, Reuters reported. Dissents came from policymakers Asada and Sato. The move is not a currency intervention, and it is not the same decision as the Federal Reserve hike earlier in the week.

The dollar rose 1.2% against the yen to 157.84, a two-week high for the dollar, after wavering during Governor Kazuo Ueda's press conference. It was set for its biggest daily gain versus the yen since December and the largest weekly rally since September 2024. An earlier print near 156.95 still had markets waiting on Ueda. Those two prints are not the same snapshot.

Finance Minister Satsuki Katayama said Tokyo will not hesitate to act after a prior US-Japan joint move. That is a warning, not an intervention on Friday. Ueda's press conference did not deliver the hawkish forward path markets wanted.

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