Japan’s central bank left interest rates unchanged at its October meeting. On 30 October 2026 the Bank of Japan (BOJ) decided to keep encouraging the uncollateralized overnight call rate, its main policy rate, to remain at around 1.25%.
A split vote
The decision was taken by an 8–1 majority. Board member Takata Hajime voted against it. In his view, underlying inflation has reached the BOJ’s price stability target, so the bank should move faster towards a neutral interest rate. He proposed raising the rate to around 1.5%, but the proposal was defeated.
In a separate, unanimous decision, the BOJ will speed up the sale of the exchange-traded funds (ETFs) it bought in past years. From January 2027 it will sell about ¥860 billion a year (book value), up from about ¥330 billion. The BOJ says the new pace equals about 0.1% of the trading value in the stock market, which has been expanding since sales began in January 2026.
Prices are rising again
The latest official price data show why rates are being discussed. According to the Statistics Bureau, the consumer price index for September 2026 rose 2.1% from a year earlier. Excluding fresh food it also rose 2.1%, and excluding fresh food and energy it rose 2.4%.
Not everything is getting more expensive. Energy prices were 0.7% lower than a year before and electricity 2.4% lower. Rice other than Koshihikari was 21.1% cheaper, while fresh fish and seafood cost 13.9% more.
Why it matters
For foreign residents, interest rates and prices affect daily life in several ways. A higher policy rate usually feeds through to savings and loan rates, including variable-rate mortgages. Rising prices for food and services squeeze a monthly budget, especially for people who send part of their salary home.
Our guides explain the basics: monthly budget and cost of living, bank accounts and sending money home and mortgages for foreign residents.