What the policy rate is
Since 19 March 2024 the Bank of Japan's policy interest rate has been the uncollateralised overnight call rate: the rate at which banks lend each other money until the next business day without collateral. The Bank does not set that rate directly. At each meeting the Policy Board sets a guideline for it, written as "the Bank will encourage the uncollateralized overnight call rate to remain at around" a stated level, and then steers the market there. The main tool is the interest it pays on the money banks hold with it: the statement of 18 September 2026 sets the rate on the complementary deposit facility at the same level as the guideline, so no bank lends overnight for much less than it can earn at the Bank.
The Policy Board has nine members: the Governor, two Deputy Governors and six others, listed on the Bank's Policy Board page. It holds eight scheduled Monetary Policy Meetings a year and decides by majority vote, with the aim of the 2 percent price stability target. A new guideline takes effect a few business days after the meeting; each statement gives the date.
How a change reaches your mortgage
Most Japanese home buyers borrow at a variable rate, as the Japan Housing Finance Agency's regular survey of mortgage users shows, which is why the policy rate matters more to Japanese households than its size might suggest.
- Variable-rate loans are usually priced by the lender from its own short-term prime rate, which banks have moved after the Policy Board's changes. Many lenders review the rate twice a year but keep the monthly payment fixed for five years, so a rise first changes how much of each payment goes to interest and only later the payment itself. Your loan contract says which applies.
- Fixed-for-a-period loans (often 3, 5 or 10 years) do not move until the fixed period ends; the rate you are offered then reflects longer-term yields as much as the policy rate.
- Fully fixed loans such as Flat 35, offered through private lenders with the Japan Housing Finance Agency, fix the rate for the whole term of up to 35 years and follow long-term government bond yields rather than the overnight rate.
To see what a change in your rate means for your payment, try the new rate in the mortgage calculator. If you are deciding whether to buy at all, the rent vs buy calculator lets you test a higher rate against the rent you pay now.
How it reaches your savings
Ordinary deposit and time deposit rates at Japanese banks moved very little while the policy rate sat at or below zero, and have risen since the Bank began raising it. The Bank publishes the average rates banks post for each type of deposit in its Time-Series Data Search. A time deposit fixes its rate for the term you choose, so it keeps paying what it offered on the day you opened it.
The savings goal calculator and the compound interest calculator take the rate your own account pays, not the policy rate. With prices also rising, compare that rate with inflation using the inflation calculator.
Reading the chart and the table
The chart draws the guideline as steps: it holds exactly where the Board set it until the next change. The table lists every change since the current framework began, newest first, dated the day the Board decided it. Meetings at which the guideline was left alone do not appear, although each of those statements is read and checked when the data is refreshed.
The first point is a range rather than a single level. In March 2024 the Board ended its negative interest rate and yield curve control and set the guideline at around 0 to 0.1 percent, so that point carries a lower and an upper bound. Every guideline since has named one level, shown as both bounds.
Earlier policy is not on this page because it was not the same kind of rate. From February 2016 the Bank applied an interest rate of minus 0.1 percent to part of the money banks held with it; from 2013 it had targeted the amount of money in the system, and for most of the years before that it set targets for the call rate itself. The Bank's own explainer on how its guidelines have changed walks through each regime.