The BoJ raised its policy rate to 1.25% on Sept 18, the highest level in 31 years, to anchor underlying inflation at 2%. Current rates sit near the bottom of the bank's estimated 1.1% to 2.5% neutral rate range, while the 10 year JGB yield recently hit 3.115%, a peak since August 1996. A Cabinet Office representative has urged the bank to re-evaluate its neutral rate estimates and carefully assess the cumulative effect of past tightening.
Wednesday, October 21, 2026
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BoJ Officials Warn Terminal Rate May Exceed Estimated Range
Global Markets20 days ago
Bank of Japan policymakers should prioritize nimble action and accelerated interest rate hikes to stop prices from overshooting, the central bank's September summary of opinions states. Some officials warn the terminal rate could exceed previously estimated ranges depending on overseas developments, and one member urged the bank to raise rates early to this terminal level. This hawkish shift comes as some board members note that most companies report only limited impacts from previous and potential future rate increases.
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