Japan Nears a 37-Year Rate Hike First: Will Bitcoin and Stocks Suffer?

Japan's latest inflation surprise could weigh on financial markets. Prices charged by Japanese producers rose 7.1% in October, above economists' 6.5% forecast.

The latest PPI report measures prices between businesses. Japan's import prices jumped 24.8% in yen terms. A weak currency is making imported fuel and materials more expensive, and companies may pass some of those costs to customers.

That adds pressure on the Bank of Japan to raise interest rates at its December 17–18 meeting.

Japan Could Make Interest Rate History in December

Japan has already increased its policy rate twice this year, in June and September, taking it to 1.25%.

Another increase would mark three hikes in a calendar year for the first time since 1989.

The comparison is striking. The BOJ raised its old official discount rate three times in 1989. It then spent decades with borrowing costs near zero, eventually adopting negative rates before ending them in March 2024.

A December hike is widely expected, although far from guaranteed. In an October Reuters poll, 54 of 78 economists predicted an increase.

BOJ officials remain divided over how quickly to tighten while consumer spending remains weak.

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