Japan's CPI Data to Influence Central Bank's Rate Decision

Japan's Consumer Price Index (CPI) data is set to be released ahead of Friday's interest rate decision, with expectations of a significant decline in December's inflation rate. According to Odaily, analysts from ING suggest that a drop in inflation could lead the Bank of Japan to reconsider its future rate hike plans. Strong wage growth and government support measures are anticipated to keep core inflation above 2%. Once the Bank of Japan confirms that core inflation will consistently exceed 2% and surpass overall inflation, it is likely to take further action sometime in the second half of 2026.