US Treasury Secretary Scott Bessent requested tighter policy to support the yen and ease pressure on the $32 trillion US Treasury market, creating tension with Prime Minister Sanae Takaichi's push for faster economic growth. Higher rates will increase debt servicing costs, which rise ~30% by 2029. A three day holiday will reduce trading liquidity, and board members Hajime Takata and Naoki Tamura leave in July 2027.
Tuesday, October 20, 2026
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Bank of Japan Hikes Rate to 1.25% for 31 Year High Under US Pressure
Global Markets30 days ago
The central bank's governing board approved a 25 basis point increase to combat rising import costs and currency volatility. This move marks the second rate hike in three months, bringing the policy rate to 1.25% following a 7 to 2 vote. Inflation remains above target, and a weakening yen continues to push domestic prices higher, prompting the Bank of Japan to tighten monetary support to reach its price target.
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