🇯🇵 Bank of Japan
The Bank of Japan (BOJ) functions as the country’s central bank, responsible for executing monetary policy to maintain price stability and promote sustainable economic growth. Since 2016, the BOJ has actively supported financial technology (FinTech) development and digital currency innovations, conducting pilot programs for a central bank digital currency (CBDC) in collaboration with private sector partners.
Major Japanese banks such as Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho have partnered with FinTech firms to improve payment systems, settlement processes, and blockchain applications. The use of online banking has surged, driven by the COVID-19 pandemic, the reduction of physical bank branches, and the rise of online-only banks like Rakuten Bank. Embedded finance, which integrates financial services into non-financial platforms, has also expanded, with examples including JRE Bank by JR East and Rakuten Bank, as well as neo-banks launched by department stores and retailers in cooperation with SBI Sumishin Net Bank.
Digital lending is growing in Japan, providing faster and more convenient credit through online platforms that leverage AI and big data, reducing reliance on traditional paperwork and credit evaluations. Additionally, regulatory technology (RegTech) is developing to support compliance management and risk mitigation, including efforts to combat money laundering and fraud, though Japan is still advancing in this area.
The BOJ sets interest rates through its Policy Board during Monetary Policy Meetings. As of late 2025, the benchmark short-term interest rate is 0.5%, the highest level since 2008, with some board members advocating further increases. The BOJ has committed to gradually raising borrowing costs if economic conditions align with its forecasts, aiming to achieve a sustainable 2% inflation target.
Japan’s economy has shown moderate recovery, supported by improved business confidence and stable inflation. The BOJ describes its monetary policy approach as easing off the accelerator rather than applying the brakes, carefully adjusting stimulus to maintain steady growth and price stability. The Bank continues to closely monitor wage trends and economic activity to guide its policy decisions.
Regarding the bond market, the BOJ has recently been cautious about aggressively intervening to curb rising government bond yields, viewing current market movements as consistent with economic fundamentals. The Bank has gradually reduced its bond purchases as part of winding down a decade-long stimulus program but remains prepared to act if yields rise excessively beyond economic conditions.
Statistics
Interest Rate History
| Date | Rate | Change |
|---|---|---|
| 2025/11/01 | 0.75% | — |
| 2025/01/01 | 0.75% | +0.25% |
| 2024/08/01 | 0.50% | +0.20% |
| 2008/12/01 | 0.30% | -0.20% |
| 2008/10/01 | 0.50% | -0.25% |
| 2007/02/01 | 0.75% | +0.35% |
| 2006/07/01 | 0.40% | +0.30% |
| 2001/09/01 | 0.10% | -0.15% |
| 2001/03/01 | 0.25% | -0.10% |
| 2001/02/01 | 0.35% | -0.15% |
| 1995/09/01 | 0.50% | -0.50% |
| 1995/04/01 | 1.00% | -0.75% |
| 1993/09/01 | 1.75% | -0.75% |
| 1993/02/01 | 2.50% | -0.75% |
| 1992/07/01 | 3.25% | -0.50% |
| 1992/04/01 | 3.75% | -0.75% |
| 1991/12/01 | 4.50% | -0.50% |
| 1991/11/01 | 5.00% | -0.50% |
| 1991/07/01 | 5.50% | -0.50% |
| 1990/08/01 | 6.00% | +0.75% |
| 1990/03/01 | 5.25% | +1.00% |
| 1989/12/01 | 4.25% | +0.50% |
| 1989/10/01 | 3.75% | +0.50% |
| 1989/05/01 | 3.25% | +0.75% |
| 1987/02/01 | 2.50% | -0.50% |
| 1986/11/01 | 3.00% | -0.50% |
| 1986/04/01 | 3.50% | -0.50% |
| 1986/03/01 | 4.00% | -0.50% |
| 1986/01/01 | 4.50% | -0.50% |
| 1983/10/01 | 5.00% | -0.50% |
| 1981/12/01 | 5.50% | -0.75% |
| 1981/03/01 | 6.25% | -1.00% |
| 1980/11/01 | 7.25% | -1.00% |
| 1980/08/01 | 8.25% | -0.75% |
| 1980/03/01 | 9.00% | +1.75% |
| 1980/02/01 | 7.25% | +1.00% |
| 1980/01/01 | 6.25% | — |