Sharp rise on an annual basis in Japan in inflation measured by the producer price index. In December, the PPI index rose on a monthly basis by 0.5%, beyond the +0.3% expected by the consensus, compared to +0.6% in November. On an annual basis, inflation shot up by 10.2%, well over the +9.5% estimated by analysts, compared to +0.3% in November. The data puts further pressure on the Bank of Japan, the central bank of Japan, which continues to pursue an accommodating monetary policy still based on negative rates.
In December, in what was its last act of 2022, the BoJ, white fly among the main central banks in the world for the ultra-expansionary monetary policy that it continues to pursue – based on negative rates and on QE to say the least little unleashed – announced that he had left the cost of money unchanged at -0.1% but that he had also made a change to the YCC (Yield Curve Control), i.e. the yield curve control tool.
The Bank of Japan has increased the fluctuation range of Japanese government bond rates, from the previous range between -0.25% and 0.25% to the new band, between -0.5% and +0 .5%. And there are those who are betting that Japan is now destined to put an end to the era of negative rates.