The Japanese Cabinet stated today that Japan's GDP for the third quarter grew at an annualized rate of 1.2% compared to the previous quarter, surpassing economists' estimates of 1%. This indicates that Japan's economy is performing better than expected, which also gives the Bank of Japan more confidence in raising interest rates during its decision on December 19. In response, economists suggest that the likelihood of a rate hike in December exceeds 50%. (Background: The Bank of Japan Governor hinted: The timing for raising rates is approaching. "The dollar to yen" has fallen below 150, signaling a warning for profit-taking on arbitrage.) (Additional background: Tokyo CPI exceeded expectations, "frightening the market," causing the yen to surge by 120 points! Expectations for a rate hike by the Bank of Japan in December are rising, beware of a potential chaos in profit-taking on arbitrage.) The Japanese Cabinet Office announced today (9th) that Japan's GDP for the third quarter (ending in September) grew at an annualized rate of 1.2% compared to the previous quarter, higher than the earlier estimate of 0.9% and also better than economists' forecast of 1%. Will this data affect the upcoming (12/19) interest rate decision by the Bank of Japan? Economists: The likelihood of a rate hike in December exceeds 50%. According to Bloomberg reports, as Japan's economic growth is revised upwards, it indirectly supports the Bank of Japan's view that the Japanese economy will expand moderately. Additionally, even the declines in net exports and capital expenditures have narrowed, and inventory growth has also been revised upwards. During the upcoming central bank week next week, the Bank of Japan will announce its benchmark interest rate on December 19 (the U.S. is expected to announce its rate policy on 12/18, with a high probability of a rate cut). Bloomberg predicts that the Bank of Japan Governor Kazuo Ueda will carefully review economic data, including the short-term economic outlook survey on December 13, before making a decision. It is understood that Ueda recently stated in an interview with Nikkei that the timing for the next rate hike is approaching. Today's GDP data, which exceeded expectations, further deepens the market's speculation that the Bank of Japan will raise rates this month. In this regard, economist Yuichi Kodama from Meiji Yasuda Research Institute stated: "Today's data again confirms that the Japanese economy is steadily recovering." He believes that the likelihood of a rate hike by the Bank of Japan in December exceeds 50%, but due to the slight appreciation of the yen recently, the central bank may also delay the rate hike decision until January next year. Additionally, Bloomberg economist Taro Kimura stated: After comprehensive consideration, we believe that the Bank of Japan will view this GDP report as evidence that the economy is strong enough to withstand further reductions in stimulus measures. Will the yen arbitrage trading face another wave of profit-taking? You may remember that in late July, the Bank of Japan decided to raise rates by 15 basis points, coupled with the U.S. Federal Reserve's preparation to cut rates at that time, causing the yen to surge and compressing the profit margin for "borrowing low-interest yen and buying high-interest currencies" arbitrage, leading many investors to close their positions and impacting global stock and currency markets with a sharp decline in early August. Although investors have had some time since August to guard against possible catastrophic consequences, if the Bank of Japan does decide to raise rates in December, it would be the second action following the rate hike in July this year, and the risks of profit-taking in yen arbitrage trading may resurface, potentially impacting global capital markets. On August 5, Bitcoin briefly fell to $48,900, the S&P 500 index plunged 3%, marking the largest single-day drop since September 2022, and the Nikkei 225 index dropped over 12%, facing selling pressure across global markets. Related reports: The effects of Japan's rate hike) Zombie companies are collapsing: This year, the number of bankruptcies exceeds 5,000, with debts reaching 1.38 trillion yen. The U.S. election storm is approaching, is the weak yen the best safe-haven asset? Who is frantically dumping U.S. bonds? Japan sold a record $61.9 billion in Q3, the highest in history, while China has reduced its holdings for three consecutive months... Is the bottom here? "Japan's economy is too strong! Experts estimate the probability of a rate hike in December exceeds 50%. 'If the U.S. cuts, Japan raises,' beware of the yen arbitrage profit-taking wave." This article was first published in BlockTempo (the most influential blockchain news media).