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BOJ Interest Rate Decision 2026: Steady Rates Amid 27-Year Yield Highs

2 min readSource

The Bank of Japan held rates steady on Jan 23, 2026, but raised its inflation outlook as 10-year yields hit a 27-year high of 2.2%. Explore Gov. Ueda's strategy.

The Bank of Japan is holding the line, but the market's pushing back harder than ever. On January 23, 2026, the Bank of Japan kept its benchmark interest rate unchanged, yet it's signaling a more aggressive stance on surging yields and inflation.

BOJ Interest Rate Decision 2026 and Inflation Outlook Hike

According to Nikkei, Gov. Kazuo Ueda and the policy board slightly raised their inflation outlook for the next fiscal year. While the status quo on rates was widely expected, the focus has shifted to the bank's willingness to take 'nimble action' as fiscal jitters mount ahead of a potential snap election.

Market Volatility as 10-Year Yield Hits 2.2%

The bond market didn't wait for a rate hike to react. The Japan 10-year yield soared past 2.2%, marking its highest point in 27 years. Meanwhile, the Yen touched 159 per dollar before a quick reversal, highlighting the fragile sentiment among global investors.

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