MARKET OUTLOOK: ING Expects BOJ to Raise Interest Rates Due to Accelerating Inflation

Forex - ING economists argue that Japan's inflation data for October shows that overall inflationary pressures remain stronger than expected, increasing the likelihood of a rate hike by the central bank in December.

Min Joo Kang and Lynn Song from ING pointed out that the inflation data has been closely monitored by market participants following BOJ Governor Ueda's hint earlier this week that the December meeting would be a lively discussion with a data-dependent decision.

ING economists, anticipating further acceleration in the inflation data to be announced next Friday, stated, “In our view, the recent trend in inflation aligns with the BOJ's inflation forecast and increases the risk of a weakening yen, which leads us to maintain our long-held view of a 25 basis point hike in December.”