The Bank of Japan raised its benchmark rate by 25 basis points to 1.25%, its highest level since 1995, during its September 17-18 policy meeting. The decision passed 7-2, with the dissenting votes aligned with Prime Minister Sanae Takaichi’s growth-first agenda. The yen weakened approximately 1% after the announcement, reaching around 157-158 per dollar, as markets questioned the likelihood of sustained tightening. US Treasury Secretary Scott Bessent has been pushing the BOJ to accelerate monetary normalization to strengthen the yen, creating opposing pressure to the Japanese government’s stance.
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