This is the strongest increase since 1981. Including fresh food prices, the inflation rate was 3.8 percent. Both values thus remained slightly above the increase in October. The latest data are fueling speculation that the Bank of Japan (BoJ) may soon resort to further measures after this week’s surprising strategy change.
The Bank of Japan surprised financial markets by loosening the long-term bond yield range on Tuesday. This was seen as the first step towards tightening monetary policy.
Until Tuesday, the Japanese central bank had always stressed that it is the only major central bank in the world to maintain its extremely loose monetary policy strategy and support domestic demand. The BOJ has adhered to its program of keeping borrowing costs at an all-time low. However, it has decided to allow 10-year Japanese government bond yields to be between minus 0.5 percent and 0.5 percent. That’s above the current minus 0.25 percent and 0.25 percent range.
(SDA)