Core Insights - Japan's core consumer price index (CPI) rose by 2.9% year-on-year in September, exceeding the 2% target and accelerating from 2.7% in August, which sustains short-term interest rate hike expectations [1] - The core CPI, excluding volatile food prices, showed a year-on-year increase of 3%, down from 3.3% in August, indicating a mixed inflation trend [1] - The inflation in Japan is primarily driven by rising energy costs and food prices, with food prices (excluding fresh items) increasing by 7.6% year-on-year in September [1] Economic Indicators - The overall consumer price index and core CPI both recorded a 2.9% increase, aligning with expectations but accelerating from the previous month [1] - Service sector prices increased by only 1.4%, significantly lower than the 4.2% rise in goods prices, highlighting a disparity in inflation across sectors [1] - Rice prices surged by 63% year-on-year in September, reaching the highest level since 2006, following last year's rice shortage [1] Monetary Policy Outlook - The Bank of Japan is set to hold a monetary policy meeting next week to consider the inflation data and discuss whether to maintain the current interest rate of 0.5% [1] - Experts predict that the inflation rate, excluding food, may meet or exceed the central bank's expectations, although the Bank of Japan has been cautious in its recent statements [1] - The central bank raised the short-term interest rate to 0.5% in January after ending its aggressive stimulus program last year, with potential for another rate hike in January 2024 [1]

Core Insights - Japan's September inflation data exceeded expectations, with the core Consumer Price Index (CPI) rising 2.9% year-on-year, maintaining above the Bank of Japan's 2% target for over three years, adding pressure for interest rate hikes in the upcoming policy meeting [1] - Despite persistent inflation, there is a division within the Bank of Japan regarding the timing of interest rate hikes, with most analysts expecting the central bank to keep rates unchanged at 0.5% during the next meeting [1][4] - The new Prime Minister emphasized the government's ultimate responsibility for economic policy and the importance of close coordination with the central bank [1] Inflation Drivers - The acceleration in inflation is primarily driven by rising energy costs and ongoing increases in food prices, with food prices (excluding fresh items) rising 7.6% year-on-year [2] - The core inflation measure, excluding fresh food and fuel costs, rose 3.0% year-on-year, slightly down from 3.3% in August [2] - Service prices increased by 1.4% year-on-year, significantly lower than the 4.2% increase in goods prices, indicating that businesses are gradually passing on higher labor costs [2] Economic Growth Concerns - Despite ongoing inflation, economic data indicates a weakening growth momentum, with the latest Purchasing Managers' Index (PMI) showing further loss of momentum in the private sector for October [2] - The manufacturing sector remains in contraction, while the service sector, although a key growth driver, is showing signs of slowing momentum [2] Central Bank Policy Outlook - The Bank of Japan's policymakers may prefer to wait for more robust economic signals before taking action, with recent statements reflecting caution regarding the impact of U.S. tariffs on the economy [3][4] - The central bank exited a decade-long aggressive stimulus plan last year and raised short-term rates to 0.5% in January, believing Japan is nearing a sustainable 2% inflation target [4] - The Bank of Japan's Governor emphasized the need for sustainable inflation driven by strong domestic demand and wage growth before resuming the rate hike cycle [5] - While most economists and investors expect the central bank to maintain rates next week, the persistent inflation above target and increasing internal divisions within the bank are raising expectations for future rate hikes [5]

Core Insights - Japan's core inflation rate accelerated to 2.9% in September, up from 2.7% in August, marking the first increase in four months, which poses governance challenges for the new Prime Minister, Kishi Matsumoto [1][4] - The inflation data aligns with economists' expectations, indicating that last year's substantial utility subsidies have contributed to this year's inflation figures [1][4] Inflation Data - The Consumer Price Index (CPI) excluding fresh food rose by 2.9% year-on-year in September, consistent with economists' median forecasts [1][4] - Energy prices increased by 2.3% year-on-year, reversing a decline of 3.3% in August, while the government implemented utility subsidies to help households cope with the summer heat [4][5] - Rice prices, a significant contributor to inflation, saw a year-on-year increase of 49.2%, down from 69.7% in August, indicating a slowdown in inflationary pressure [4][6] Economic Policy Implications - The inflation report supports Prime Minister Kishi Matsumoto's focus on addressing the cost of living crisis as a top priority [4][6] - Economists predict that the Bank of Japan (BOJ) will maintain its current policy rate in the upcoming meeting, with potential rate hikes expected in December or January [5][6] - The BOJ faces challenges in tightening monetary policy due to persistent price pressures, despite a cautious approach to avoid premature tightening [5][6] Future Outlook - A core inflation indicator, excluding energy prices, rose by 3.0%, showing a slight slowdown from 3.3% [5] - Service prices, a key component of sustainable inflation, increased by 1.4% year-on-year, slightly down from the previous month [5] - The potential for further declines in core inflation is suggested as rice price increases have peaked [6]

Core Insights - Japan's core consumer price index (CPI) rose by 2.9% year-on-year in September, indicating a slight rebound from August and highlighting the cost of living pressures the new government will face [1][1][1] - Rising energy costs are the primary driver behind the inflation increase, with key inflation indicators remaining at or above the Bank of Japan's 2% target for three and a half years [1][1][1] - Economists predict that the Bank of Japan may implement its next interest rate hike in December 2025 or January 2026, with a shift in expectations for a 25 basis point increase from October to December [1][1][1] Economic Policy Implications - The new Prime Minister, Sanna Takashi, has identified addressing the cost of living crisis as a key focus of her administration, with current inflation data providing a basis for her policy agenda [1][1][1] - The coordination between the government and the Bank of Japan regarding monetary policy will be tested as the new administration seeks to manage inflation while addressing economic challenges [1][1][1]

Core Viewpoint - The Bank of Japan (BOJ) is likely to raise interest rates before December, influenced by the new Prime Minister's expansionary fiscal policies, which may help the economy withstand U.S. tariffs [1][2]. Group 1: Interest Rate Outlook - Former BOJ member Maeda Eiji suggests that the central bank should gradually increase interest rates, as the slow pace has led to negative effects such as soaring urban housing prices and rising living costs due to a weak yen [1]. - Maeda predicts that the BOJ may raise rates to 0.75% in December or January, with a potential further increase to 1% by summer next year, entering the neutral interest rate range [3][4]. Group 2: Economic Conditions - The impact of U.S. tariffs on Japan's economic growth is less severe than initially expected, and Japanese companies are likely to maintain positive capital expenditure and wage increase plans [1]. - The BOJ's next policy meeting is scheduled for October 29-30, where they will discuss maintaining the current rate of 0.5% and release new economic growth and inflation forecasts [3]. Group 3: Government and Monetary Policy Interaction - There are concerns that the new Prime Minister, who supports expansionary fiscal and dovish monetary policies, may lead to a delay in rate hikes. However, Maeda argues that the government's stimulus measures could actually accelerate inflation, prompting the BOJ to raise rates sooner [5].

Group 1 - A majority of economists expect the Bank of Japan to raise key interest rates in October or December, with nearly 96% predicting a minimum increase of 25 basis points by the end of March next year [1][2] - Among 75 economists surveyed, 60% anticipate the Bank of Japan will raise short-term rates from 0.50% to 0.75% within the current quarter [1] - The internal stance of the Bank of Japan's policy committee appears to favor an interest rate hike, despite potential delays due to domestic political and global economic uncertainties [2] Group 2 - Financial markets currently price in a 40% probability of an interest rate hike before the end of the year [3] - High City Sawa, the newly appointed Prime Minister, has committed to increasing government spending in key areas such as energy and economic security under a framework of "responsible and proactive fiscal policy" [3] - Among respondents, 67% expressed uncertainty about agreeing with High City Sawa's economic policies [3][4] Group 3 - Concerns about the impact of fiscal policies on financial health were raised by nearly two-thirds of respondents [4] - Market pressures, such as rising long-term bond yields, may constrain fiscal expansion efforts [5]

Group 1 - Morgan Stanley suggests shorting the dollar in a "blonde girl" environment where US stocks rise while Treasury losses are controlled [1] - Bank of America warns that tightening credit conditions may trigger passive selling, indicating potential bear market signals for the stock market [1] - Goldman Sachs expects a 0.3% month-on-month increase in both overall and core CPI for September, maintaining core inflation around 3.1% [2] Group 2 - Societe Generale indicates that a mild recession in the US could lead to a weaker dollar due to potential rate cuts [3] - UBS believes that the Bank of Japan is likely to raise interest rates in the coming months, supported by rising long-term inflation expectations [4] - Citigroup does not anticipate that the new Japanese Prime Minister will pressure the Bank of Japan to avoid rate hikes, given the current economic context [5] Group 3 - Goldman Sachs predicts Brent crude oil prices will drop to $52 per barrel by Q4 next year, citing inventory increases and refining margins [8] - Singapore Bank notes that investors may still be keen to increase gold allocations during price pullbacks, raising their 12-month gold price forecast to $4,600 per ounce [9] - Canadian banks forecast record corporate earnings for Q3, supporting the Toronto stock market's upward trend [10] Group 4 - Huachuang Securities reports a recovery in fund allocations to credit bonds, suggesting opportunities in 4-5 year maturities [11] - Galaxy Securities highlights a market style shift benefiting the food and beverage index, with a focus on new consumption trends [12] - CITIC Securities observes a divergence in economic data for September, with production remaining resilient while demand indicators decline [13] Group 5 - CITIC Securities notes that recent adjustments to Hainan's duty-free shopping policy could boost sales, enhancing consumer experience and increasing foot traffic [14] - CITIC Securities also reports advancements in solid-state battery technology, which may accelerate the commercialization process [15]

Group 1 - Morgan Stanley strategists indicate that the 10-year U.S. Treasury yield may have further room to decline after falling below 4.0%, citing factors such as the ongoing government shutdown and escalating trade tensions as supportive elements for U.S. bonds [1] - Wall Street strategist Ed Yardeni suggests that a drop in oil prices could push the benchmark U.S. Treasury yield back to levels seen over a year ago, potentially reaching 3.75% if oil prices continue to fall and the Federal Reserve lowers interest rates [2] - UBS's chief Japan economist Masamichi Adachi believes that the Bank of Japan is likely to raise interest rates in the coming months, as current negative real interest rates create a very accommodative financial environment [3] Group 2 - The new Japanese Prime Minister, Sanae Takaichi, may face challenges in addressing inflation, as the opposition party has consistently opposed cash distribution measures [3] - A survey indicates that Singaporeans expect inflation to remain manageable, with overall inflation expectations dropping from 3.5% in June to 3.3% in September, the lowest level since December 2021 [3] - The Bank of Korea is expected to maintain its policy rate at 2.50% during the upcoming meeting, with analysts predicting no rate cuts in October due to concerns over household debt and a heated real estate market [4]

在此次会议召开前一个月，9月的央行政策会议上已有两名委员会成员提议加息。知情人士表示，在该 会议上，由9人组成的政策委员会可能会继续讨论加息的合适时机。 此外，日本自民党总裁高市早苗21日在临时国会众议院和参议院首相指名选举中均胜出，当选日本第 104任首相。下周的会议将是其上任后的首次日本央行政策会议。高市早苗以支持宽松货币政策闻名， 她当选首相的可能性上升后，市场对下周会议加息的预期已有所降温。 知情人士透露，日本央行官员表示，央行将继续与政府保持密切合作，同时政策决定将完全取决于 对"物价稳定目标实现进展"的评估。部分官员指出，只需对新政府可能实施的经济与财政政策进行初步 评估，就有可能决定是否加息。 从隔夜互换指数定价来看，交易员认为本月加息的概率约为25%——尽管本周这一概率略有上升，但仍 远低于上月末约70%的水平；12月会议加息的概率则升至约38%。 许多关注日本央行的分析师认为，该央行不愿在高市早苗上任后立即采取行动，以避免重蹈过去因加息 与政府产生冲突的覆辙。高市早苗的经济顾问本田悦朗（Etsuro Honda）表示，10月加息为时过早，但 12月加息基本无问题。 据知情人士透露，尽管日本经 ...

Core Viewpoint - The market's expectation for a rate hike by the Bank of Japan (BOJ) during the October 30 policy meeting has significantly diminished, with officials indicating that there is no urgency to raise rates even if economic progress is made towards price targets [1][2]. Group 1: Economic and Monetary Policy Outlook - BOJ officials believe that the economy and inflation are developing in line with expectations, with a gradual increase in the likelihood of achieving future outlooks [1]. - There is a cautious stance regarding immediate action due to external uncertainties, particularly the impact of U.S. tariffs, which have not yet fully manifested in the data [2]. - The new Prime Minister, Fumio Kishida, is known for advocating monetary easing, which aligns with the BOJ's current position of delaying rate hikes [1][4]. Group 2: Market Reactions and Expectations - Following Kishida's election as Prime Minister, the market has reacted with a weaker yen and rising stock prices, reflecting expectations for continued stimulus policies and delayed rate hikes [1]. - The probability of a rate hike this month is estimated at around 25%, a slight increase from previous weeks but still significantly lower than the approximately 70% expectation at the end of last month [3][4]. - The BOJ will closely monitor financial market developments, especially fluctuations in the yen, as these are now more directly impacting inflation compared to the past [2][4].