Japan's inflation surge signals economic trajectory. Consumer prices, excluding fresh food, rose to 2.9% in October, aligning with market projections. This intensifies the Bank of Japan's reliance on forthcoming data for its December policy decisions. If the BoJ needs to fight rising prices and adopt a higher interest rate regime this will put a lot of pressure on the ECB to defend yield spreads and avoid drastic capital moves out of the Eurozone.
This comes in a moment where the bloc entered recessionary territory...
This would be a huge policy change for Japan, right? Do you think their economy could stand a strengthening yen cutting into exports?
They are competing with a tumbling european industry that, thanks to its energy policy, lost competiveness. They can stand a revaluation of the yen
I think
For a moment I thought you were not going to post something bad about Europe.
I cannot see BoJ acting suddenly extremely worried about inflation now. I think yield spreads would be still enough to not act irrationally. But yeah, it could be the start of something.
Hahaha. But what if the market sniffs out a european debt crisis?