Bank of Japan rate hike threatens Australia's Japan holiday bargain
A Bank of Japan rate hike this week would strengthen the yen, making Japan holidays more expensive for Australian travellers.
The Bank of Japan is widely expected to lift interest rates by 0.25% this week as it tries to control rising inflation. The move would mark the highest rate in 31 years.
Australia's exchange rate has been exceptionally favourable: one Australian dollar was worth as much as ¥114.40 on September 1. The rate was a 36-year high that made Japan holidays cheaper for Australian travellers.
Almost one million Australians travelled to Japan in 2025-26, more than double pre-pandemic numbers. A rate hike would strengthen the yen, pushing the exchange rate in the opposite direction.
Markets have already responded: the rate fell to ¥552,190 as expectations for the hike built, though it has slightly bounced back.
- 0.25 percent to 1.25 percent
- BOJ rate increase
- ¥114.40 per AUD on September 1
- Exchange rate peak
- Nearly 1 million
- Australians to Japan 2025-26
- 7.6 percent in August
- Japanese wholesale inflation
Why it mattersAustralians planning Japan holidays will face higher costs if the yen strengthens, while the country's surging popularity as a destination relies on that favourable rate holding.
AustraliaAustralians who booked Japan trips or were considering them will pay significantly more if the rate weakens as expected. The country's status as Australia's third most popular destination depends on the exchange rate advantage.
✓ Claims checked against the source. checked 7 d ago
