BOJ Raises Rates as Yen Slumps, Oil Prices Dip in Global Markets

Global markets react as BOJ hikes rates, yen weakens, and oil prices fall amid inflation concerns.

September 18, 2026 One Min Read

POLICY WIRE — Tokyo, Japan — The Bank of Japan surprised markets by raising interest rates to a 31-year high of 1.25%, aligning with expectations but signaling a more measured approach than previously anticipated. The move sent the yen plunging against the dollar, dropping nearly 0.7% to 157.1 per dollar.

The decision marked a shift from the central bank’s previous pattern of biannual rate increases, with this being the first hike in just three months. Despite the increase, two board members dissented, suggesting internal debate over the pace of monetary tightening. Investors now await further clarity on future policy moves, especially as global central banks prepare for additional rate hikes in the coming months.

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Meanwhile, crude oil prices remained stable near $100 per barrel after a brief dip, as traders hoped for alternative supply routes amid ongoing tensions in the Middle East. In Asia, stock markets saw modest gains, supported by a positive lead from Wall Street, as investors expressed relief over the Federal Reserve’s commitment to curbing inflation.

Reporting by Policy-Wire (PW)

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