The Bank of Japan voted seven to two on 18 September 2026 to guide the uncollateralised overnight call rate to around 1.25%. The new guideline took effect on 24 September, alongside changes to rates on its deposit and lending facilities.
The decision statement described a moderate economic recovery and identified several sources of price pressure: high crude-oil prices, yen depreciation and expanding demand linked to artificial intelligence. It said business costs were beginning to reach consumer prices while companies continued to pass wage increases into selling prices.
The bank also said financial conditions remained accommodative. Its policy guidance left further adjustments dependent on economic activity, prices and financial conditions, rather than committing to a fixed timetable for future increases.
A separate summary of opinions, published on 1 October, shows why the decision was contested. Some opinions stressed upside inflation risks and argued that monetary accommodation should be reduced. Others pointed to subdued consumption and weak domestic-demand components of GDP, arguing that the case for another increase was insufficient.
The distinction matters when reading central-bank communications. The September statement records the board’s collective decision; the October document summarises views presented at that meeting and does not constitute a new rate decision. Together, the documents show policymakers weighing imported cost pressures against the strength of household demand. Neither publication removes the uncertainty surrounding the next policy move.