BoJ rate decision · 18 September 2026

The BoJ raised its short-term policy rate from 1% to 1.25% by a 7–2 vote; the statement stresses that underlying inflation is approaching 2% and could overshoot the target.

• The target for the uncollateralised overnight call rate was raised from 1% to 1.25%; the complementary deposit facility rate rises to 1.25% and the basic loan rate to 1.5%, effective 24 September.
• The vote went from 8–1 to 7–2, with the dissent reversing direction: in July Takata had proposed a hike, while this time Asada and Sato dissented in favour of holding, arguing that prices and the economy had not accelerated enough to justify a hike.
• An economic assessment was added: medium- to long-term inflation expectations have continued to rise, underlying CPI inflation is approaching 2%, and there is a risk it overshoots 2% as firms lean more towards raising wages and prices.
• For the climate-change funding operations, the loan rate was switched to a floating rate and upper limits were set on loans (unanimous).

Tone of the statement: more hawkish than the previous one — Besides the hike, the explicit risk of underlying inflation overshooting 2% pushes the statement in a tightening direction; the dissents now favour holding.

The summary and tone assessment were produced by a language model (claude-code/opus, prompt version 1); they are no substitute for the official text.