All eyes are on Japan's upcoming Consumer Price Index (CPI) release, as it serves as a critical input for the Bank of Japan's (BOJ) interest rate decision this Friday. Economists anticipate a notable decline in December's headline inflation rate.
Market Analysis and Implications: Analysts at ING suggest that a significant drop in inflation could prompt the BOJ to reassess its timeline for future rate hikes. However, underlying factors are expected to maintain upward pressure on core prices:
*Strong wage growth from this year's shunto (spring wage negotiations).
*Ongoing government subsidy measures.
These elements are projected to keep core inflation above the BOJ's 2% target.
Policy Outlook: The consensus among observers is that the BOJ will likely wait for confirmation that core inflation is sustainably above 2% and outpacing headline inflation before moving decisively. Current market pricing suggests the next policy tightening action could materialize sometime in the second half of 2026, making this week's data a key piece of the puzzle for the central bank's forward guidance. $BTC $ETH $BNB #BTC #MWAM_Crypto
