Asian Stocks Slip as Tech Rout Deepens, Japan Steadies Ahead of Election 
Asian Markets Slip as AI Spending Fears Shake Tech, Wall Street Futures Rebound 
Dollar Steadies Ahead of ECB and BoE Decisions as Markets Turn Risk-Off 
Gold and Silver Prices Slide as Dollar Strength and Easing Tensions Weigh on Metals 
RBI Holds Repo Rate at 5.25% as India’s Growth Outlook Strengthens After U.S. Trade Deal 
Thailand Inflation Remains Negative for 10th Straight Month in January 
Silver Prices Plunge in Asian Trade as Dollar Strength Triggers Fresh Precious Metals Sell-Off 
Dow Hits 50,000 as U.S. Stocks Stage Strong Rebound Amid AI Volatility 
Oil Prices Slip as U.S.–Iran Talks Ease Supply Disruption Fears 
Trump Lifts 25% Tariff on Indian Goods in Strategic U.S.–India Trade and Energy Deal 
South Korea’s Weak Won Struggles as Retail Investors Pour Money Into U.S. Stocks 
South Korea Assures U.S. on Trade Deal Commitments Amid Tariff Concerns 
China Extends Gold Buying Streak as Reserves Surge Despite Volatile Prices 
U.S. Stock Futures Slide as Tech Rout Deepens on Amazon Capex Shock 
Australia’s December Trade Surplus Expands but Falls Short of Expectations 
Dollar Near Two-Week High as Stock Rout, AI Concerns and Global Events Drive Market Volatility 
Inflation in Tokyo surged in December, climbing to 2.4 percent as price pressures widened. With the Bank of Japan’s January policy meeting looming, markets are speculating on whether a further rate hike is on the horizon amid signs of steady economic progress.
Core Inflation in Tokyo Rises Amid Broader Price Pressures
Market expectations for an imminent interest rate hike are sustained by data showing that core inflation in Japan's capital city rose in December due to broader pricing pressures.
Some experts believe the Bank of Japan (BOJ) will raise short-term interest rates at its next policy meeting on January 23 and 24, and the data will be one of the elements that the BOJ examines at that meeting, Investing.com reports.
While most market analysts were expecting a 2.5% increase, the core consumer price index (CPI) in Tokyo, which does not include the highly variable cost of fresh food, up 2.4% year-over-year in December. It came after November's 2.2% year-on-year increase.
Demand-Driven Inflation Index Under BOJ’s Scrutiny
Following a 1.9% increase in November, the statistics indicated that another index that excludes fresh food and fuel expenses increased 1.8% year-over-year in December. The BOJ closely watches this index as a stronger indicator of demand-driven inflation.
To gauge the extent to which Japan is achieving the Bank of Japan's 2% inflation target—a condition for additional rate hikes—policymakers closely observe the Tokyo inflation data, which is seen as a leading indicator of national trends.
Tokyo Inflation as a Predictor of National Trends
In March, the BOJ halted negative interest rates and in July, it lifted the short-term policy rate to 0.25%, all because Japan was seen as making good progress towards its inflation target.
Interest rate hikes by Governor Kazuo Ueda are possible if the economy and prices follow the board's predictions.
Interest rates will be hiked to 0.5% by March of next year, according to a Reuters poll that was conducted earlier this month. Markets are more curious about when the Fed would boost rates—at its meeting on January 23–24 or at the rate review on March 18–19—following its decision to maintain rates unchanged this month.
