Bank of Japan expected to raise rate in December 2026

Business Nov 02, 2026

The Bank of Japan (BOJ) is expected to bump up its key interest rate in December 2026, possibly from 1.25% to 1.5%.

This is a major shift after years of super-low rates, and it's happening because inflation in Japan keeps running higher than the bank wants.

Japan's BOJ balances growth and inflation

The BOJ is trying to get inflation under control without hurting economic growth, but things are tricky.

Japan's economy expanded at an annualized rate of 1.4% in the second quarter and core inflation hit 2.1% in September.

The central bank says any future moves will be careful, since changes could impact everything from household budgets to business loans.