Economists at Daiwa Securities think the Bank of Japan will keep borrowing costs unchanged this month, yet may reframe its inflation outlook in a way that leaves a December rate increase firmly in play for yen and JGB traders.
Japan's core CPI advanced 2.1% from a year earlier in September, up from August's 1.7% pace and surpassing the Bank of Japan's 2% objective, intensifying speculation about additional borrowing-cost increases.
Japan's core consumer prices rose 2.1% year-on-year in September, matching forecasts and climbing back above the Bank of Japan's 2% objective for the first time since December. The yen strengthened on the news.