2026-01-13 09:27:19

Critical Data Point Determining Japan Central Bank's Next Steps: Tokyo Inflation Report

The economic indicator set to knock on Japan's door on November 28 is preparing to surprise market participants. When Tokyo CPI data is released, the decision-makers' hands will be decisive before the (18-19) mid-December central bank meeting. The report could potentially completely change current expectations regarding the interest rate hike scenario.

**Market Volatility May Occur Amid Low Trading Volume**

The thin trading volume brought by the holiday season generally indicates higher volatility. The USD/JPY exchange rate and the Japanese government bond market could experience significant fluctuations, especially if strong inflation figures emerge. The yen may strengthen, and financing conditions could tighten.

**Which Scenario Seems More Likely?**

If inflation readings in the services sector exceed expectations, the likelihood of an interest rate hike increases, which could trigger a strengthening of the yen. Conversely, if inflationary pressures appear calmer than anticipated, the BoJ may delay its rate move until 2026. Both scenarios could significantly alter investor risk perception and force a recalibration of market dynamics.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.