The November CPI released tonight was in line with expectations both year-on-year and month-on-month. The market expects that the probability of a 25 basis point rate cut at the December interest rate meeting has increased to 96%, boosting market sentiment and expectations in the short term.
Let's turn to the Bank of Japan, another protagonist of the interest rate meeting next week. On Monday, the Bank of Japan said that Deputy Governor Ryozo Himino will give a speech to local business leaders in Yokohama on January 14, 2025, and then hold a press conference. Since 2013, members of the central bank's board of directors have never held such an event before the first policy meeting of the new year. For this special arrangement, many institutions expect that the Bank of Japan's next interest rate hike may be pushed to January of 25 years. The recent political chaos has led to turmoil in the Korean capital market, which is another reason why the Bank of Japan may postpone the interest rate hike, after all, it is worried about triggering a chain reaction in the market.
Then the Fed will continue to cut interest rates in the next week and the Bank of Japan may postpone the interest rate hike. These two expectations are beneficial to the market.