Japan Markets Highlights — Sep 20, 2026 | Aivina
September 20, 2026
The Bank of Japan raised its benchmark interest rate by 25 basis points to a 31-year high of 1.25% on September 18. Japanese equities rallied strongly with the Nikkei 225 closing above 65,000, while the yen slid past 157 per dollar following a split 7-2 board vote. Despite persistent price pressures, central bank guidance remains cautious and strictly data-dependent regarding future policy tightening.
Highlights
- BOJ hikes interest rate to 1.25% in split vote
- Nikkei 225 surges over 1.3% past 65,000 level
- Yen weakens past 157 per dollar post-meeting
Macro Overview
Inflation
August core CPI rose 1.7% year-over-year, while underlying inflation approaches 2% amid elevated energy costs and rising import prices.
Interest Rate Outlook
The BOJ raised rates to 1.25%, signaling further gradual rate hikes as underlying inflation stabilizes near its 2% target.
Risk Sentiment
bullish
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