Japan's core CPI is higher than expected, Bank of Japan may raise interest rates by 25 basis points in December

According to BlockBeats, Japan's Ministry of Internal Affairs and Communications released CPI data for October, with core CPI increasing by 2.3% year-on-year, higher than the expected 2.2%. Excluding fresh food and energy prices, the CPI increased by 2.3% year-on-year, indicating continued inflationary pressure.

The annual growth rate of service prices rose from 1.3% to 1.5%, reflecting that companies will pass on labor costs to consumers. The Bank of Japan will hold an interest rate decision meeting on December 18-19, and 55% of economists predict that it may raise interest rates by 25 basis points.

Capital Economics believes that rising potential inflation, rebounding consumer spending and a weaker yen will provide momentum for rate hikes. If interest rates are raised, yen carry trades may be closed and market liquidity will tighten, so we need to pay close attention to global capital market trends.