The BoJ's deposit facility rate moves to 1.25% tomorrow, by a 7-2 vote

Victoria Shinder23 September 2026, 19:322 min read

The Bank of Japan's amendment to the Principal Terms and Conditions of Complementary Deposit Facility, decided at the Monetary Policy Meeting of 17–18 September 2026, takes effect tomorrow, 24 September 2026. Paragraph 4 is rewritten in a single line:

"The interest rate shall be ~~1.0~~ 1.25 percent per annum."

It moves in step with the guideline decided at the same meeting, in which the Policy Board — by a 7-2 majority vote — set out to encourage the uncollateralised overnight call rate to remain at around 1.25 percent. The same 7-2 majority changed the rates applied to the Bank's measures: the complementary deposit facility to 1.25 percent, and the basic loan rate under the complementary lending facility to 1.5 percent, with the basic discount rate likewise 1.5. All of it is effective 24 September.

By contrast, the change to the climate-response funds-supplying operations — a floating loan rate and upper limits on lending — was decided unanimously.

What it means

Tomorrow is the first day the new reference rate actually reprices anything. The amendments published on 18 September rewrote four separate BoJ facilities so that their loan rate is the average of the rates in paragraph 4 of these Complementary Deposit Facility terms, taken at the date of disbursement. Paragraph 4 is the line changing tomorrow. A facility that draws down on 24 September prices off 1.25; one that drew down last week priced off 1.00.

The vote split is the other thing to carry. Seven to two on the rate, unanimous on the operational amendment — which says the disagreement on this Board is about the level, not about the machinery. That is a more informative distribution than a single headline number, and it is visible only because the BoJ publishes the votes per decision rather than per meeting.

⚠️ We are reporting an effective date and a published rate, not a forecast. Nothing here says what the Board does next, and the guideline is set for the intermeeting period only.