Bloomberg Daybreak: Asia Edition Tokyo Inflation Beats Forecast, Keeping BOJ on Rate Hike Path
Nov 28, 2025
Paul Dobson, Executive Editor for Asia Markets at Bloomberg, dives into Tokyo's surprising 2.8% core CPI, suggesting a potential rate hike from the Bank of Japan. He discusses the political factors that may cause the BOJ to hesitate and examines Japan's robust industrial output amid a weakening yen. The conversation shifts to China's real estate troubles, particularly Vanke's bond delay, raising red flags for investor confidence. Dobson also connects the dots between AI-driven tech momentum in Asia and shifting market sentiments, including Bitcoin's role as a risk appetite indicator.
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Tokyo Inflation Strengthens BOJ Case
- Tokyo core CPI at 2.8% slightly exceeded forecasts, reinforcing BOJ's case for tightening.
- Paul Dobson sees a December hike as unlikely and expects action more realistically at the start of next year.
BOJ Prefers Fiscal Tools Over Fast Tightening
- BOJ prefers fiscal measures to curb cost-of-living pressures rather than aggressive monetary tightening.
- Markets expect caution because policymakers believe inflation will slow back toward target.
Debt Plan Risks Pushing Long-Term Yields Up
- Japan plans extra spending financed by more government bond issuance, pressuring long-term yields.
- Markets want issuance concentrated at the short end to avoid steepening the yield curve further.