Ueda Kazuo "released the wind": Interest rate hike "is coming soon"

The expectation for a rate hike by the Bank of Japan in December is heating up. According to a report by the Nikkei on Monday, Bank of Japan Governor Kazuo Ueda stated in an interview last Thursday that with the economic development trend progressing as predicted by the central bank, a rate hike is "imminent." The Bank of Japan's communication issues have been heavily criticized, especially after the rate hike in July triggered turmoil in global markets. Some strategists pointed out that this interview by the Bank of Japan may be aimed at preventing a repeat of similar events. Following the report, Japan's 2-year government bond yield briefly rose by 2.5 basis points to 0.625%, the highest level since 2008, while the 10-year government bond yield also increased by 1.5 basis points to 1.075%. U.S. Treasury yields followed suit, with the 10-year U.S. Treasury yield rising by 4 basis points to 4.22% during the session. Overnight swap market pricing shows that the likelihood of a rate hike by the Bank of Japan in December has reached 67%, while the probability of a rate hike in January is as high as 90%. In the interview, Kazuo Ueda also reiterated the target of a potential inflation rate rising to 2% and stated that the bank will closely monitor the U.S. economy and will take "measures" if necessary to address the weakness of the yen. Currently, Japan's inflation outlook is steadily improving. Data released last week showed that Tokyo's November CPI (excluding fresh food) rose by 2.2% year-on-year, surpassing the 2% mark