The Bank of Japan is set to raise interest rates on Friday to a three-decade high and signal its readiness for further hikes beyond next year, underscoring its conviction that sustained wage gains will keep inflation around its 2% target.

Learn what the stated annual interest rate is and how to calculate it without compounding, plus how it compares to the effective annual rate.

Leaders who fail to adapt to higher interest rates risk being squeezed by rising debt service costs, which can cripple innovation and operational budgets.

The Bank of Japan is set to raise interest rates on Friday to a three-decade high and pledge to keep hiking borrowing costs, closing the year with two rate hikes despite headwinds from U.S. tariffs and the inauguration of a dovish prime minister.